There are some steps which evolution can't achieve, requiring steps thru self-destructive configurations to reach a superior productive state. Making the leap from one to another without having to survive the middle is necessary to longer progress. That's kinda the point of genetic engineering: just make the changes we need NOW, rather than trying to persuade progress on a natural path nobody wants to take.
One example I particularly like is why there aren't animals that roll as their primary method of transportation. The steps in between walking and perfect roundness are so disadvantageous that mutations in that direction would probably be the death of that individual (imagine a square armadillo). If an animal was genetically engineered to be able to roll without all the steps I'm between, it might make them even more fit than their non-mutated cousins.
I think you won't find animals that use rolling as their primary method. Problems is that for feet, you need a patch of relatively flat surface every footstep. For wheels, you need a continuous stretch, or you need a design that can withstand impacts. Small animals have an advantage there, as gravity isn't as harsh on them as on larger animals.
Very interesting. I kinda figured my explanation wasn't that accurate, but I think it conveyed the point pretty well that sometimes we can't get to new optimal states because every path to that state is worse than the current optimal state.
There is also nothing wrong with iterative improvement. I quite like it actually, and I think people who dismiss it out of hand are weird.