That is essentially why HIPAA exists. And the negative and limiting effects of HIPAA on clinical trials is well acknowledged and is considered as an acceptable cost of HIPAA.
HIPAA was written in 1996. The human genome project was completed in 2003, and WGS wasn't in the clinic for another decade. Nothing about HIPAA is considered or intentional in the context of current medical practice or research. It's just an old law that carries forward mindlessly like all laws do.