And if you knew in advance which scientist would come up with a successful result, all you need is $200,000. In reality you need to give a $200,000 grant to many groups and hope that at least one comes up with a good result. This isn’t a matter of incompetence, you need to test every possible theory or method to find one that works. Also, in all likelyhood the group is using some of the equipment their previous grants (and those of their colleagues) paid for, and has grad students who are getting their own government funding, etc. And that’s not even counting all the previous research on which it’s based.
And this limitation on cell lines would have made it impossible to make the breakthrough the Korean group did. You’re right that it’s only a ban on federal funding, but if I understand it correctly, it means you need to set up an entire lab with no federal funding at all. Do you have any idea how limiting that is? And we’re talking about basic research which, even if successful, would require enormous resources before it can be turned into a money-making echnology.
It’s called being set up to fail. Place limits (deliberate roadblocks) on what is to be allowed and how it is to be done, and then use the money (lack of it) as the final nail in the coffin. Afterwards, put on the sad face and claim “we tried”.