What made 20th century eugenics bad was the fact that governments inserted themselves into trying to decide what is the "ideal genome". That's an un-knowable question, and trying to presuppose it is playing God and will doom you to doing horrible stuff.
However, that doesn't change the fact that there are objectively more fit and less fit genes. What we have now could be called Dysgenics, because money is taken away from the honest and successful people (reducing their ability to reproduce) and given to dishonest and unsuccessful people (increasing their chances). Current policy is literally anti-evolution.
There is nothing inherently unethical about conditioning gibs on getting snipped. Nobody is forced to accept that deal. It may be a bad plan just on account of the fact that too many people would accept the deal and you'd have population collapse, but that's not an ethical problem.