Excuse me, but my impression is that it's exactly the opposite. It's the totipotent feature of embryo cells that makes them such a wild-card in proposed therapeutic use: fingernails, hair and teeth growing in patient's brains, etc. Thr more specific the stem cells is (e.g. pluripotent, multipotent) the more useful it is in actual treatment applications.
The whole point of this announced breakthrough is that they believe they have gotten these cells to have all the qualities of embryonic stem cells. I.e. they are totipotent; can be turned into any and all types of cells. For use in treatments, they would interfere with the cells’ development to steer them into becoming only certain types of cells or a certain organ, but without such steering they would develop into a complete embryo. If they can’t develop into a complete embryo, then they are also limited in what types of cells/organs they can be steered to develop into.
The problem with “adult” stem cells is that they cannot be turned into any and all types of cells needed — certain adult stem cells can be turned into a limited number of cell types, but they have all gone too far down the path of the differentiation to be turned into other cell types. What these researchers claim to have done is to have taken an adult cell and engineered it back to the embryonic state, from which it CAN develop into all cell types. They seem unsure as to whether they have really gotten 100% of the way there, but they know they need to get 100% of the way there in order for their technique to be really useful for what they’re hoping it will be useful for.
The tumor problem is over-hyped (and not entirely limited embryonic cells), but it will be solved in due course like all the other challenges.