shouldn't you have put up a link to his www site, http://www.kschroeder.com/

Um, the idea in Permanence is that entities evolved for habitats will eventually outcompete entities that use tools to dominate those habitats, even if the tools are more efficient than the evolved solutions.

There's no need for genetic engineering, and, indeed, in the cases most prominent (in the far galactic past) in the book, no genetic engineering is implied.