That would actually be more of an argument against adult stem cells than fetal stem cells. The real benefit of fetal stem cells which is poorly expressed by most advocates, imo, is that the cells have not be subjected to a lifetime of environmental exposure to a whole host of carcinogens.
When working with adult stem cells, there's already been a significant level of genetic damage accrued by the time of the cells' harvest. Fetal stem cells, on the other hand, are as close to pristine genetic condition as is possible.
Regarding the issue with FDA testing, simply put, it's impossible. Current FDA guidelines would have every individual person's stem cells, derived from him or herself, go through clinical trials. It's those same poorly conceived guidelines that have made an unassailable barrier against bacteriophage treatments in the US, despite their long and phenomenally effective history against bacterial infections in Eastern Europe.
Furthermore, it's not going to be the pharmaceutical companies that are doing the stem cell treatments. It's going to be university labs and some of the larger hospitals associated with medical schools. We've all heard how cost-prohibitively expensive the clinical trials are for all but high-likelihood-of-success drugs, so can anyone honestly say that they think universities or hospitals, which are always strapped for cash, are going to be able to fund these clinical trials, even with massive NIH grants?
It just won't happen. The only solution is for the FDA to implement standards of treatment for the medical experts working on stem cell treatments. Patients will have to sign a mountain of informed consent forms and from that point on, everyone keeps their fingers crossed. Twenty years down the line, there may be devastating side effects, but there's absolutely no way to clinically test for it *in each individual patient* using either today's technology or Federal guidelines.