This is what it would be nice to see if someone did do this. A small tang without any deformity or health issues. Unfortunately that is unlikely. I mean just look at what we did to the pug. Those guys look cute but can barely breathe with those squished snouts.Genetic engineering is to manipulate the organism DNA to result in expression of certain characteristic. Example: insert jellyfish color genes (DNA) into albino fish chromosome (DNA) to cause the fish to produce florescent pigments.
I am sure if there is a way to insert a "dwarf gene" into one of the tangs to have a tiny tang, it will be done, and these fish will be for sale and would be a great hit.
I don't see anything wrong with it. We have deformed fish like fancy gold fish, award winning and expensive show (deformed) goldfish. If there is a choice for max 3 inches yellow tang, that is free of deformities other than being small, I would definitely go for it.
Putting this CB mini Yellow tang in a 40 gal tank would be infinitely better then cramp a full-size tang into the same tank.
Unfortunately, I think it is not possible. I may be wrong, but fish full grown size is determined by many factors, not just 1 gene, so genetic engineering is impossible. Selective breeding is our only option.