Sorry, but I don't like your reasoning.

• Emotionally volatile people shouldn't be automatically assumed to fail upon most such temptations, after all (when they fail in a big way, that's when we hear about it the most), and might not even be a net negative for society in other spheres (although yeah, they probably are... still, it's awfully cold just to unapologetically thin their numbers with eugenics. I know that a lot of things LWians (incl. me) would do or intend to do are awfully cold, but hell, this one concerns me directly!).
• The "volatility" of one's behavior is a sum of the individual's psychological make-up - which might or might not be largely hereditary - and the weakness or strength of one's tendency for self-control - which is definitely largely cultural/environmental.

Look at the Far Eastern and Scandinavian societies. Wouldn't an emotionally unstable person being raised in one of them be trained to control their emotions to a much greater degree than e.g. in Southern Europe?

Further on the "hereditability" part; I'm really emotionally unstable (as you might have witnessed), but my parents are really stable and cool-headed most of the time; however, my aunt from my mother's side is a whole lot like me. I attribute most of my mental weirdness to birth trauma (residual encephalopathy, I don't know if it's pre- or post-natal), but I don't know whether part of it might be due to some recessive gene that manifested in my aunt and me, but not at all in my mother.