I think, from what I'm reading here, that the objection would be to insert huge amounts of human DNA into the embryo's.
The main reason I would do that is to use the embryo as a culture base, a growing medium. Certain animals have a very strong ability to maintain growth of DNA within the embryo.
If you were trying to develop a way to grow stem cells than you might have to put huge amounts of DNA into the embryo's to try and manipulate an increased formation of stem cells so they could be harvested. Now, this is all experimental, you're trying to get away from using human embryo's which is a highly charged scenario but still try to get stem cells manufactured.
You certainly do not want the construct of stem cells that a rabbit or mouse has, you want to have the exact copy of a normal, healthy stem cell that has the exact molecular structure of a human. So...you have to 'clear' all the relevant DNA of the rabbit from the embryo while leaving all the growth factors that allow for DNA replication.
If it is successful than you have a 'harvested' population of stem cells that can be used but ultimately you have a stem cell growing lab that can produce huge amounts of stem cells.
You are not trying to manipulate the stem cells into 'super stem cells' or mess around with the human DNA construct, you are simply trying to get sheer numbers of cells because you will need millions of these cells to get any positive effect in a human.