Will contraception lead to a dystopian society?  It depends.  If governments control individuals’ contraception, then yes.  If individuals control their own contraception, then no.  The same goes for genetic engineering.  In the hands of the government, it would be a pillar of totalitarianism.  In the hands of parents, however, genetic engineering is a fantastic opportunity.

I discuss the dystopian danger of genetic engineering in my chapter on “The Totalitarian Threat” in Global Catastrophic Risks:

Instead of searching for skeptical thoughts, a
totalitarian regime might use genetic testing to defend itself.  Political orientation is already known to
have a significant genetic component. (Pinker 2002: 283-305)  A “moderate” totalitarian regime
could exclude citizens with a genetic predisposition for critical thinking and
individualism from the party.  A more
ambitious solution – and totalitarian regimes are nothing if not ambitious –
would be genetic engineering.  The most
primitive version would be sterilization and murder of carriers of
“anti-party” genes, but you could get the same effect from selective
abortion.  A technologically advanced
totalitarian regime could take over the whole process of reproduction, breeding
loyal citizens of the future in test tubes and raising them in state-run
“orphanages.”  This would not
have to go on for long before the odds of closet skeptics rising to the top of
their system and taking over would be extremely small.

I pursue the utopian promise of genetic engineering in Selfish Reasons to Have More Kids:

Only one last obstacle stands between us and so-called “designer babies”: figuring out which genes matter for each wish. Solid answers may be decades away, but human genetic engineering requires no more scientific breakthroughs–just persistence. The first customers will be wealthy eccentrics, but in a few decades, GE will be affordable and normal. Without strict government prohibition, I predict that our descendants will be amazingly smart, healthy, and accomplished.

Most people find my prediction frightening. Some paint GE as a pointless arms race; it’s individually tempting, but society is better off without it. Others object that GE would increase inequality; the rich will buy alpha babies, and the rest of us will be stuck with betas. But there’s something fishy about these complaints: If better nurture created a generation of wonder kids, we would rejoice. Suppose you naturally conceived an amazingly smart, healthy, and accomplished child. Would it bother you? If your neighbors had such a child, would you forbid your children to play with him? If your neighborhood were full of wonder kids, would you move away?

On my office wall, I have a picture of my dad at his high school graduation, towering a foot above his grandparents. Such height differences were common at the time because childhood nutrition improved so rapidly. I doubt that the grandparents who attended that graduation saw height as an “arms race” or griped that rich kids were even taller. They were happy to look up to their descendants — and we’d feel the same way. Deep down, even technophobes want their descendants to surpass them. They just think that picking embryos is a vile way to make it happen.

Moderate defenders of genetic engineering often distinguish between good GE that prevents disease and disability and bad GE that increases intelligence, beauty, athletic ability, or determination. The theory is that good GE helps kids lead better lives, but bad GE merely panders to parents’ vanity. The logic is hard to see. We praise parents who nurture their kids’ health, intelligence, beauty, athletic ability, or determination because we know they’re all good traits for kids to have.

As usual, the wise way to avoid dystopia is to limit government, not technology:

Allowing parents to genetically engineer their children would lead to
healthier, smarter, and better-looking kids. 
But the demand for other traits would be about as diverse as those of
the parents themselves.  On the other
hand, genetic engineering in the hands of government is much more likely to be
used to root out individuality and dissent. 
“Reproductive freedom” is a valuable slogan, capturing both
parents’ right to use new technology if they want to, and government’s duty not
to interfere with parents’ decisions.

Critics of genetic
engineering often argue that both
private and government use lie on a slippery slope.  In one sense, they are correct.  Once we allow parents to screen for genetic
defects, some will want to go further and screen for high IQ, and before you
know it, parents are ordering “designer babies.”  Similarly, once we allow government to
genetically screen out violent temperaments, it will be tempting to go further
and screen for conformity.  The
difference between these slippery slopes, however, is where the slope
ends.  If parents had complete control over their babies’ genetic makeup, the
end result would be a healthier, smarter, better-looking version of the diverse
world of today.  If governments had complete control over babies’ genetic makeup, the
end result could easily be a population docile and conformist enough to make
totalitarianism stable.

The same goes, of course, for cloning.