From wikipedia,
To put if in laymen's terms, eugenics is basically breeding by natural selection. It's taking the healthiest, fittest, most genetically "superior" members of society, and breeding them, and discouraging the "inferior" from breeding.
The ethical issues should be obvious. First, when I say "superior" and "inferior", I'm not referring to race or anything. I mean, people who are genetically "stronger" or "fitter", or healthier, or however you put it.
The problem is, who decides what is "better"?
As for me, I think eugenics is OK if we are unbiased in how we implement it; ensure truly that people aren't discriminated on the basis of race or nationality or something like that. Then, we can encourage or implement the breeding of the fittest. The reason is because this can help push the evolution and health of our own species.
If you wish to read it more in detail, here is the entire page on eugenics
http://en.wikipedia.org/wiki/Eugenics#Suggestions_and_ideas
Norse, you realize that breeding doesn't work that way, right? Desirable traits never come in neat little packages in living beings. If you keep breeding the strongest animals over and over, you eventually discover that you bring out recessive traits. As there is no definition of "fittest" (see below) there are no two scientists who'd agree on "fitness" in every single case.
From a natural selection standpoint (which is *not* what this is, eugenics is artificial selection) "fitness" simply means traits that give an individual the ability to pass the more genetic material to future generations. That's really it; it's almost a tautology. It's impossible, sitting in a lab to look at two people and decide who's more "fit" from that perspective. It can only be determined retroactively. Prospectively one can only guess at the answer nature would have arrived at, and those guesses will vary from person to person.
When eugenicists use the term "fitness" they mean something completely different (as that, it seeks to encourage specific traits that are good for "society" or "individual happiness," "humanity" (which tends to be "the traits I, the eugenicist, prefer most") or some other criterion (often unspecified). Eugenics in the past has been overly optimistic assuming that you can breed smarter, stronger, faster, more moral people. The problem there is that genes don't work that way. Assuming you find someone who's superior in all those qualities, there will still be undesirable traits in his or her DNA. If you keep breeding the specimens who most excel in those traits, you will eventually wind up bring some of these undesirable traits (like hemophilia, weakened immune systems, and other problems) to the fore.
What you want is not eugenics in the traditional sense, but genetic engineering. You should strive not to breed the smart people with other smart people, but to change the genetic codes of the stupid people, in utero, so that they are smart too. You'll still encounter problems (as individual genes often control multiple traits, so flipping the genes for increased intelligence, may also (hypothetically) increase the risk of schizophrenia.
That said, who wants to live in a world full of smart people? Imagine we do learn to tinker with intelligence in a safe way. Every one's a genius, so who collects the garbage? Who drives the buses for a living? Which genius is it who has to walk through the sewer systems to inspect them for leaks and problems? There will always be dirty jobs, even if they change over time.
Maybe you could breed different "grades" of people. That may not seem fair, but you could always tinker some more to make the lesser grades happy with their jobs, and unhappy with other jobs. It would be a brave new world...or one of eloi and morlocks.