It also isn't cheaper when you consider it knocks mi/gal down by about 25%.
I didn't know this. Got a link to a source?
If you're talking about a 10% ethanol blend, 25% sounds awfully high.
EPA MPG estimates for E85 (85% ethanol + 15% gasoline) in flexible-fuel vehicles is typically 30% less than for gasoline. Also, ethanol has 30% less BTU (energy) than gasoline.
So, theoretically, if all else is equal, a 10% ethanol-blend should result in a MPG penalty of less than 5% when compared to straight gasoline.
At any rate, a 25% penalty from a 10% blend doesn't sound right to me.