Yeah, but using cloning for breeding the perfect superrace is a lot different than using cloning to populate a planet. In the latter case, you don't care if the replica is a perfect copy of the original, you just need a lot of people fast. Really, it's not cloning which is the important technology as much as the availability of incubators for embryos on a mass scale (the limit isn't how many children can be conceived, but how quickly women can bear children, esp. in a modern society where child-rearing is a time-consuming process that needs to compete with demands for other specializations).
Anyway, I find it unbelievable that in 700 years, reproductive technologies wouldn't have fully been mastered. In the last 50 years alone, we've made huge strides forward in the technology. The choice for our future society isn't
can they do it, but
should they do it. I always got the impression that the main prohibitions against Gen-Select and the genetic enhancement program were ethical, not technical. The technical hurdles were overcome easily enough in the few decades since the genesis of the project in the Terran-Kilrathi war (although to be sure, there were probably preliminary research programs they were based on that dated pre-war) to its culmination in the WC4 period, which would indicate the technology was possible to develop (as in the Manhatten project's A-bomb development effort), but only a desperate war dictated that the work be done, no matter the cost. There are a lot more downsides to cloning or whatever technology might allow for mass reproduction besides imperfect replication.
Heck, even Blair could've been an early product of the GE program, for all we know (sorta the "Is Deckard a replicant?" dilemma in Blade Runner). After all, how does this guy survive through the whole TC-EK war, deliver the T-bomb to Kilrah, and is still kicking when he gets killed/kidnapped by the Nephilim? The odds against his survival were tremendous, and yet, he still pulls through. Blair's and Tolwyn's DNA are both used by the GE program, but what if those samples were available because they were products of an earlier program? What if all their memories are faked plants?
OK, so I think that whole scenario is pretty unlikely (you have to pick a point some time where you're going to believe what people tell you), but maybe you can see how it would be possible to twist reality so that we, the game players, never really know the whole story of what's going on.