Ethanol is the cheapest, easy way to increase octane in our fuel. Now all here, I assume, understand octane and it’s role in engines, right...
There are multiple octane levels available in ethanol-free gasoline, too - so that is a secondary factor. Primarily, ethanol is used as an oxygenate in gasoline - an oxygen-bearing liquid that promotes more complete fuel combustion (in order to reduce the amount of carbon monoxide produced).
This goes all the way back to the big-city smog issues that brought about catalytic converters. Look at the pure-gas website and try to find non-oxygenated fuel in any high-population density area. Often you have to drive a long distance to get out of a metro area's "population bubble", before you can find ethanol-free fuel for sale. Inside the "bubble", you're outta luck.
The only problem is alcohol is a big source of smog. Big enough that they demanded it be taken out of windshield washer fluid.
So it’s great for gasoline, which causes nothing but problems, but bad for other purposes where it might actually be helpful.