Kellmeyer misrepresents, and you seem to have missed, the proper context for the quote. McKay is not saying that the science itself is a "fairy tale." He thinks the science is valid and workable. What he's really saying is that the people with the money need something that will convince them to send money: the "fairy tale" in question is the description of some of the possible results of the research.
No, the fairy tale is the false assertion being hyped to the public that fetal stem cell research holds hope of curing Alzheimers disease. THAT fairy tale is purposeful manipulation and a likely lie, as the author of the piece rightly points out.