My guess is that the assumption is that US gov funded labs are enough of many suppliers revenue that it'll be effective, but I'm 100% speculating and it may be total garbage speculation given that I have no idea how much hobbyist level DNA projects are a thing or how much they're a thing for non-medicinal business purposes.

If you read the next two sentences it makes it fairly obvious that this is a plan to indirectly target suppliers. Federally funded researchers will be required to

"procure synthetic nucleic acids and benchtop synthesis equipment from U.S.-approved suppliers. Those vendors must verify their customers’ identities and screen orders for potentially dangerous sequences that, for example, could encode toxins or pathogens."

If this was just about feds self-policing, they wouldn't have the customer identity requirement.

Probably they're taking this route because AI is moving fast and Congress moves slowly.

Trouble is, that assumption hasn't always worked out in the past: https://en.wikipedia.org/wiki/Bruce_Edwards_Ivins

But yes, this is stupid. No one who is inclined to build a biological WMD is going to be more than mildly inconvenienced by supply restrictions. DNA isn't plutonium.

When DNA is outlawed only outlaws will have DNA.