This was, of course, easily predicted. The linked article attributes the letdown to something that wasn't known at the time, "epigenetics," the influence of cellular context on the expression of genes. But it was predictable even based on what was known.
The linked article describes the pathetic state of our understanding at the time: "But in the past few years, researchers have come to recognize how grossly oversimplified was the so-called central dogma of molecular biology — the notion that DNA makes RNA, RNA makes proteins, and proteins make us." The sequence of DNA codons produces a predictable sequence of amino acids in the protein.
And then the protein folds. Sequences of amino acids from far distant parts of the protein are brought next to each other, the chains twisted and bent, to make the active sites of the protein. The protein folds itself in milliseconds. Human beings with supercomputers pretty much can't do it at all. So, knowing the DNA sequence still leaves you an NP-complete problem with large n away from anything biological.
I happened to know about the folding problem because I shared an apartment with a couple of theoretical biochemists who were working on it in the winter of 1986-7. It's still far from being solved. Solving it would be one of the biggest steps that could be taken, to make genomic sequencing useful. But as I commented over at Transterrestrial Musings:
Protein folding — being able to predict the 3D shape of a protein from the amino acid sequence — would be a lot more immediate use. But the public mind isn’t prepared to accept “protein folding” as a magical incantation. “DNA,” on the other hand, is used as magic in innumerable movies, TV shows, and comic books. Anything to do with DNA is already overhyped.