I think the issue is that while it's not too hard to swamp 10 gallons of burning ethanol with 100 gallons of water, it may be harder to swamp 1,000 gallons of burning ethanol quickly enough to ensure that the mixture is too dilute to burn by the time it spreads.
Exactly. It’s just that the guy I was responding to was acting like people were freaking out over gasoline with ethanol in it, and the concern was just what you’ve said: Large amounts can’t be diluted fast enough with water.