The quoted line is more responding to your second paragraph, not your first: "Obviously when we tell engineers to consider the ethical implications of the project that they are working on, we are talking to the first group"
No, I think when "we" tell engineers that, we're addressing a straw-man, posturing and showing off our superior ethics. Imagining that there's an audience of engineers who just need to be told that what they're doing is unethical is vain.
The "first group" refers to "The people who agree that the project they are working on is unethical".
Telling people to, in essence, 'follow their heart' and do what they think is right is not "posturing and showing off our superior ethics". If they think that their work is unethical, then they should not do it.
The third paragraph is the paragraph that endorses posturing and showing off our superior ethics.
No, I think when "we" tell engineers that, we're addressing a straw-man, posturing and showing off our superior ethics. Imagining that there's an audience of engineers who just need to be told that what they're doing is unethical is vain.