Ever since refiners and blenders of gasoline ramped back on their use of MTBE since 2005ish, most moved over to ethanol because it was 1) a cheaper alternative to blending in or refining higher octane feedstocks to unleaded gasoline to meet higher octanes and 2) using oxygenates (MTBE and ethanol) in non-attainment areas in the US made it almost mandatory to use ethanol to not further exacerbate the low air quality standards in most heavily populated urban cities.
Ethanol does have lower energy density than pure gasoline on a like for like comparison hence why filling up your GM vehicle with E85 and driving under identical circumstances will yield less mpg than its lower ethanol cousin E10.
Vehicles now are intelligent enough to advance or retard timing based on all of the different blend ratios (i.e. you fill up with E85 and drive to almost empty and fill up with E10. You are now running <E85. You get back closer to home to your local E85 dealer and fill up with E85 and now you are somewhere in the middle). Your vehicle is adjusting back and forth with all of that extra oxygen meaning it potentially is never operating at maximum performance.
Ethanol also has a propensity to weaken certain soft metals in older carbureted engines (i.e. marine, yard, cycle, and other small engines) as well as attacks and drys out some gasket materials.
It's also hygroscopic which means it loves water. This means it's difficult to ship in nondedicated pipelines because it will pick up all of the water in the bottom of the pipeline as well as it acts as a solvent and it would potentially clean out the pipe. That sounds like a good thing in some ways but all of that gunk ends up somewhere and that can be at the bottom of your local service station's tank or at the bottom of yours. So ethanol is shipped via tank truck or barge and blended into a blend tank with gasoline then shipped to your local service station.
The posters that recommended using Sta-Bil are spot on. Gasoline should be used in approximately 30 days before it starts to gum and cause varnish. Because it has so many light ends, it will start to evaporate and leave that sticky varnish behind. Fuel technologists I have spoken to recommend using Sta-Bil with premium gasoline as a fuel of choice for small engines. The higher additive treat rate in premium tends to stabilize gasoline longer than lower octane unleaded gasoline.
Ethanol is a necessary evil and I can't imagine it disappearing anytime soon. But given the choice, I'd run pure gasoline every day of the week if I could.