I'm trying to trace this story through the steps, but the simplest answer is
What proof is there that these capsules contain powdered human flesh
obtained from dead babies?
None. Or at least, none has been provided.
The main source for the vast majority of these news stories in the western media appears to be an AFP Newswire story. This story quotes a Korean customs official by name saying the pills trade will be cracked down on, but no source has been provided at all for the supposed fact these pills are made from babies, the custom official refers to them as "Human Flesh".
I had a look over all other news sources for this story I could find, and none of them provided any more evidence or information.
- The earliest mention I can find for the story is the Korean Times. ( 6th May 2012 ) However this provides no sources other than the nebulous "Customs Officials".
- A Mention a couple of days later, (which is mentioned in the AFP story) comes in the English version Chosun Ibo (8th May 2012). This story says in first paragraph "powdered flesh" tablets were caught by customs, then, the second paragraph says that
Illegal sales of capsules containing the powdered flesh of dead babies
from China are not uncommon,
Which to me is a little weasely and doesn't provide evidence. One thing to note is that nowhere in the article does it state that the specific pills seized by customs contain dead baby flesh.
- However The short English version in Chosun Ibo appears to come from a korean story which can be found here (6th May 2012), I guess - as it has the same image. I would love someone who reads Korean to come and translate this article. Google translate shows a bit more info. on the number reported in AFP (29 attempts where 11,430 tablets smuggled in hand luggage, and 6 attempts where 6021 tablets smuggled in the mail). But it really doesn't illuminate whether the dead babies part is speculation or coming direct from the customs service.
- Finally, on early news sources there's [this story] 6th May 2012. 5
What facts we can take as read I guess.
- The story was in Korean news on the Sunday (6th may), and went across the world after AFP posted it's story on the 8th May. AFP appears to collate Sundays news and gets some quotes from an official, which don't reflect on the crux of the story
- South Korean Customs did seize > 17,000 pills in a public health
crackdown, most sources seem to agree on that.
- South Korean customs related that these pills most likely contained human tissue/flesh, as most of the news sources agree on that.
- The source of this flesh is unconfirmed or no evidence is provided either way.
- It would be exceedingly difficult to tell scientifically whether these pills containing a ground up substance contain placenta, menstrual blood, or material from a foetus. In addition most early news sources appear more worried at the public health issue than the source of the pills.
As purely circumstantial evidence, and knowing these pills are intended as medicine, we can look at Chinese traditional medicine and see what the most traditional medicines are, we can see that placenta, Urine, menstrual blood, bone, even Penis's have been commonely used in the past, but experts say there is no history of usage of Foetus's, and I would tend to believe them.
In conclusion I think we can say that "as yet" no evidence is available of such a widespread practice, and Kane Gao's explanation that this is most likely Placenta pills seems very plausible.
Sorry this isn't a definite answer, but I thought it was best to put the best knowledge i could find up, so people would see a likely answer first.