Ethanol isn’t really a crappy fuel; although somewhat less dense and more caustic than gasoline, it burns fine in properly designed engines. It might be easier chemically (and politically) to convert the unnamed intermediate “synthetic gas” to ethanol than to another fuel. It also might make for some interesting but crowd-pleasing flavors of mixed drinks at the local bar.
Don’t forget how ethanol absorbs moisture. It’s a crappy fuel. Syngas can be converted into real fuels like gasoline and diesel.