In many banks other than the strawman provided, it meant that 'eugenics' was alive and well most places.
The idea that people choosing donors from a catalog amounts to eugenics assumes that the people choosing the donor (in the case of anonymous donors, which is only a portion of all artificially inseminated children) have some rigor in choosing; i.e., that marketing doesn't influence them somehow. Most of the supposed rigorous screening is nothing more than checking boxes for physical characteristics such as height and eye color, education level attained, and family history of certain diseases.
There have been quite a few sperm bank scandals, including one where the proprietor of the sperm bank used his own seed even though he told his cutomers they were selecting someone else's from a catalog. The Dutch case is notable because it violates one of the recommendations (no law in the U.S.) that limit a donor to 25 births per 800,000 population.  But it is certainly not the only case.
 "The closest thing to a regulatory body overseeing sperm donation throughout the U.S. is a nonprofit called the American Society of Reproductive Medicine. The ASRM has a set of recommendations that physicians, fertility specialists, and sperm banks are encouraged to follow."
"The ASRM also recommends setting a limit of 25 births per donor within a population of 800,000, in order to lower the risk of accidental incestuous relations. In many other countries, there are laws putting caps on the number of births per single donor within populations of a certain size, but the U.S. doesn’t have any such law."