Brazil is considered one of the world leader in ethanol, the country with the most successful alternative fuel program, one of the cheaper (if not cheapest) ethanol technologies and, by using sugar cane, one of the most energy efficient. All cars here can easily handle up to E40, and most cars can handle any mix of gas and ethanol. Oh, and the flex fuel technology for any kind of mix? Mostly developed here also.
That all being said, I don't use pure ethanol. We are not able to find pure gas here, because of local laws (the government mandates the ethanol level), but I avoid it as much as I can. Even with everything we have in our favor here, it is still most expensive, and the overall car performance is not as good as with gas. For ethanol to be a cheaper option for the consumer, its price on the pump has to be no higher than 75% of gas.
There is, however, another side of the coin. Gas is a limited resource. We need to develop alternative fuel technologies, and right now ethanol is the best, if not only, viable option. The technology is getting cheaper everyday, and improving a lot. As someone who saw the so called birth of the car ethanol, in the 1980's, I can see how much that changed.
Last, but not least, gas with some ethanol in it does pollute less. I remember seeing some time ago some studies regarding E20(ish), and the number was impressive.
All told, it is an important technology, it is not a scam or a threat, but it is still improving. Luckly, we still have the luxury to choose, so we can say no. That won't last, tho.