Lets not forget why Ethanol was first being put into gasoline. It replaced MTBE as a oxygenate. MTBE replaced Lead as the primary oxygenate, both of which have been found to cause harm to the environment and its occupants. So far, Ethanol is a much safer oxygenate, minus the algae blooms, water contamination, soil contamination and soil degradation caused by the current monoculture of growing inedible field corn. Oxygenates are used to increase the octane number of fuel helping with knocking and making it burn cleaner, releasing less unspent fuel which improves the emissions of vehicles. So it seems that not only are they adding Ethanol into fuel to lower the fuel consumption but also to decrease emissions, especially for the people who refuse to give up their suburbans, etc (only referring to the people who don't need them).
Its amazing how many people drive around empty full size SUV's from work to home, from work to lunch, from lunch to work, and from work to home. Its a complete waste of energy, something that most of Europe has figured out but the US has yet to admit there is a problem. Sorry, separate issue.