Not quite, the corn has stored energy in the form of sugar. Yeast cheaply transforms the sugar into alcohol. The expensive part is seperating the mash and water from the alcohol. It works because the sugar is made with free energy from the sun. But you are correct, there are fewer BTU's per gallon of ethanol than gasoline. However, it is still not as cheap to make ethanol than gasoline.
Do not forget that there is more than ethanol produced from the corn. The high protein corn mash makes excellent livestock feed. The protein benefits consumers in many ways.
My point exactly, it is not cheap period to make ethanol, and if you take away the subsidy cheap isn't even part of the equation. It is a market for corn, and IMHO that is the best that can be said about the subject.