This sets up the dissolution of the lubricating oils on the cylinder walls, which causes rapid engine wear or damage. The higher the percentage of Ethanol, the more damage it causes. The only remedy to counter this would be to directly mix lubricating oil in the fuel.
Racing engines that run on methanol would surely seize up if they did not do this. Methanol also attracts moisture and creates jells, flaking in the fuel system, rapidly corrodes aluminum blocks and heads and even a sand-like material that destroys fuel injector systems.
Racing teams that use Methanol, must completely flush the fuel systems after every race. They cannot let it sit still very long or it will turn to jelly and destroy the engine's aluminum parts.
Methanol is made from coal and is much dryer than Ethanol which is why it is the only Alcohol based fuel that can be run as a direct fuel for racing engines.
Ethanol is bad, bad stuff to be mixing in our high cost vehicles, and the reaction it causes when it comes in contact with Benzene and several other chemicals in gasoline does far more damage than any benefit it might offer.
Indy cars run on ethanol and have for a few years.
You can (and some have) use ethanol in dragsters. My old company had one (great fun but they didn’t let me drive it!). The biggest issue is that most dragsters are set up for methanol.
And you can get 100% ethanol as easily as 100% methanol. Using a mole sieve is one way.
Methanol in the US is nearly always made by converting natural gas through a high-pressure catalytic process in the presence of steam.