The crux of their troubles comes from this paragraph in the Warning Letter: "However, even after these many interactions with 23andMe, we still do not have any assurance that the firm has analytically or clinically validated the PGS for its intended uses, which have expanded from the uses that the firm identified in its submissions. In your letter dated January 9, 2013, you stated that the firm is “completing the additional analytical and clinical validations for the tests that have been submitted” and is “planning extensive labeling studies that will take several months to complete.” Thus, months after you submitted your 510(k)s and more than 5 years after you began marketing, you still had not completed some of the studies and had not even started other studies necessary to support a marketing submission for the PGS. It is now eleven months later, and you have yet to provide FDA with any new information about these tests."

The FDA, while being a pain in the rear at times, will actually work with you to meet compliance. But you have to show work and be continually in touch with them and show progress (and document everything according to your own procedures, complying to regulations of course). You can't just say you're working on compliance and then not follow through and show evidence. The issue for 23andMe is the on-label use of the product "in the diagnosis of disease or other conditions or in the cure, mitigation, treatment, or prevention of disease, or is intended to affect the structure or function of the body." They market the product this way. If you want to market your product as such, you have to show proof to the FDA and receive approval to label the medical product in this manner. It looks like 23andMe is either not working towards compliance (and is misleading the FDA) or is doing a terrible job documenting their work towards compliance and keeping the FDA abreast (my guess is this is what's happening). That in itself will get you in trouble, but then expanding your marketing for even more on-label use of the product - which hasn't been submitted to the FDA apparently - while at the same time not having FDA approval for the original use is just plain stupid.