Corn is used because it is still the cheapest. The Ethanol subsidies/tax credits are paid regardless of the source of ethanol, including imported.
THE ECONOMIC FEASIBILITY OF ETHANOL PRODUCTION FROM SUGAR IN THE UNITED STATES
http://www.usda.gov/oce/EthanolSugarFeasibilityReport3.pdf
USDA July 2006, see page iv
U.S. Corn wet milling = 1.03
U.S. Corn dry milling = 1.05
U.S. Sugar cane = 2.40
U.S. Sugar beets = 2.35
U.S. Molasses = 1.27
U.S. Raw sugar = 3.48
U.S. Refined sugar = 3.97
Brazil Sugar Cane = 0.81
E.U. Sugar Beets = 2.89
All in dollars per gallon
Why do you think U.S. sugar cane is $2.40 per gallon whereas Brazil'a sugar cane is 81 cents?
Because we are subsidizing and supporting a huge alternative sugar industry, namely beets. The amount of land in the United States suitable for growing cane sugar is small compared to the demand. Cane sugar also produces a higher quality and yield of sugar versus beets. But beets have been a boon to the economies of areas subsidized to grow them and they well not easily go away.
Likewise, your two year old figures on corn convesation costs are much higher now, but these subsidies are not going to go away quietly either.
The rich no-drill greenie weenies in San Fransicko, New Yawk and Seattle have common ground with the sugar beet farmers in North Dakota and corn growers in Iowa on this issue.