Sorry - that simply doesn't follow, regardless of how obligated you may feel!
The genetic modifications may have operated by changing the brain in a way which makes it more easily aware of a larger reality - just as some people clearly have more access to the larger reality than others, and psychic abilities often run in families.
If a physical thing ( like genetics ) can affect the detection of a particular stimuli, then by logical extension, that makes that stimuli in question physical as well, because by definition, if it weren't also physical, then our physical brains would have no ability to detect it.
If you choose to argue that point, then you just don't get that by the very nature of their definitions, the physical and the non-physical are mutually exclusive. Consequently if the phenomena does interact with the physical, then it too must be physical — but just not understood ( yet ).
Now, it may be the case that genetic modification will never yield enhanced PSI abilities, but then we're still left with the same problem in non-genetically enhanced individuals. If the phenomenon is real, and their very physical brains are able to detect the phenomena, then by extension, that phenomena must also be physical.
Arguing otherwise would be like arguing that squares can have 3 sides or H2O is made of methane or 2+2=5. Try to get past your dislike of logical deduction. It's a very powerful tool in the truth seeking toolbox. Ideas that make sense are always going to be more likely to be the case than ones that don't make sense.
The key to explaining mysteries that don't make sense is in finding ways of interpreting them that do make sense. That's how the heliocentric model of the solar system was worked out. It's how determining the world is a sphere was worked out. It's how virtually every scientific principle we know of has been worked out.
So if science is going to have any chance of explaining these phenomena, that's how it's going to get done — not by nonsensical wishful thinking that caters to our cherished beliefs in magic and dogma. I suspect Dr. Davis would be onboard with that.