The example you mentioned about the media is right on the money.
Here in Colorado U.S.A, we were one of the first states to shift to ethanol fuel blends back in the 1970's to control CO emissions during the winter. There was a brief period of minor problems caused by ethanol added to fuel.
There were a rash of cars that had plugged fuel filters --- translation, ethanol cleans harmful deposits out of your fuel system and if it is full of varnish and other deposits it will clog your fuel filter. Once that intial phase was past there were no problems. In addition, the ethanol keeps your fuel injectors cleaner than they would be with out it, it drastically reduces exhaust gas temps, it drastically reduces Carbon Monoxide emissions. Ethanol fuel blends will actually produce more power than straight gasoline blends, as the ECU adjusts for the new mixture.
There is some debate about oil compatibility and ethanol fuels, but practical experience over 30+ years shows its only a theoretical problem and especially with modern synthetic lubricants, it is a non-issue.
There is a slight reduction in gas milage. The ethanol has a lower specific energy content than the gasoline it replaces, however it actually makes some of that back due to the increase power you produce you spend less time in the throttle, to get the acceleration you want. The loss in milage is a minor problem if the consumer realizes he is not being "cheated" by running "bad gas".
There was also a brief period in the 1970's where there were fuel system incompatibility issues. Some fuel hoses and carburator float materials did not play well together with ethanol. This has long since been resolved my the auto manufactures. If you have a 1970's vintage VW and have never changed the stock fuel lines you have a problem, they will start leaking after a while. If you have a modern car it is a non-issue.
There are some folks that contend that ethanol fuel actually costs more energy to produce than it delivers this has been proved to be absolutely untrue. Those numbers are based on very old data that does not match up with the current art of manufacture.
The country of Brazil has made extensive use of ethanol fuel blends for decades. They run up to 22% ethanol in modern cars with no problems, the ECU can adjust for it. They also run some cars on 100% ethanol. Any cars marketed as FFV (flexible fuel vehicles) are designed by the factory to run on ANY blend of ethanol and gasoline.
Your going through the same bogus hype generated by folks that are trying to protect vested interests as we did. Some of these folks are just ignorant of the facts. This led to the large scale introduction of MTBE which has since been discoverd to be a major source of pollution to ground water, and is now rapidly being outlawed.
Ethanol is much less toxic than the gasoline that it replaces.
This site will give you some basic info you might find interesting.
http://www.ethanol.org/