Slightly off topic-
Rebel is correct.
If an engine was built from the start with ethanol only in mind, you would find that it would have a higher compression ratio, and much more aggressive timing parameters. This would allow you to use the ethanol to its full potential - you would create more horsepower and torque over the entire RPM range and run with just as good or better fuel economy as gas. However you would not be able to run gasoline in this engine, unless it was forced induction (where the cylinder pressure can be significantly controlled). Running ethanol only is not practical for most people because of lack of infrastructure, so car manufactures make flex fuel vehicles, which come with a host of compromises, include sorry ethanol mileage. The vehicles' ECU is programmed to identify the fuel as ethanol and make adjustments as necessary, but you can only adjust things so much (like variable valve timing, etc) to improve the dynamic compression ratio for ethanol use. Thus the compromise of bad ethanol mileage, while retaining the ability to adjust back to more optimal fuel and timing maps for gasoline. Why do they make flex fuel vehicles then? Its all about PR.