The whole ethanol thing is just political BS.
Jack-asses can say, look we are helping the environment, the economy and the farmers, when in reality they are damaging all of them.
One thing that bothers me, in addition to what you have already stated is all of the ag folks who will soon lose their investments when people figure this out.
They are already seeing the price of the C2H5OH dropping while the cost of corn is up.
A few days ago I googled info on this subject and the energy ratio info (lies), that came from the industry folks themselves, were still pretty thin.
The worst case, like you have said, is a negative.
Some folks still seem to think that the bio-diesel idea might be economically viable.
I don't have a personal opinion on that one yet.