A much better fix for this is actually shorter than the proposed legislation. All you need is to add one line to DMCA 1201 that says it doesn't apply in the absence of infringement or to tools that have significant uses other than infringement.
But that would annoy some groups they don't want to annoy.
Instead, they are doing the smallest and least objectionable thing possible, in an attempt to stunt any legislative momentum around his broader initiative.
This is how the game is played. Now he has to make a move to try to either broaden a political coalition (he has the industry part down) to go further than what the administration explicitly supported, and deal with the silent but definitely existing industry coalition that is opposing it, or accept the smaller "fix" and use it to establish the legitimacy of his advocacy efforts, and save the actual legislative fight for a time when their isn't as much industry opposition.
Despite what folks here may think of congress in general and their intelligence, they are usually quite good at politics, or they would not be playing at this level.