I hate E10 for standard street cars due to its negative effects on fuel economy. If E10 were significantly cheaper than pure gas, I would be more happy. But when a station is converted from E0 to E10, prices stay the same, but the station sees a 10% increase in fuel volume sold (due to the mean customer getting worse fuel economy). Plus the refiner / blender get some tax breaks for the ethanol (e10 is more profitable per gallon than E0).
I hate E10 on vintage hi-performance 2-strokes as it makes tuning tougher (inconsistent enleanment problems) and can be murder on crank seals, lubrication and plastic tanks.
However, the claim that since Ethanol has less BTU/Lb. than gasoline means it makes less HP is not true. If more BTU in fuel is the answer for max performance, how come there is not really any diesel in motorsports?
Diesel 130,500 Btu/gallo
Gasoline 125,000 Btu/gallon
Ethanol 75,700 Btu/gallon
An engine can be purpose built for Ethanol, and make potentially more power than gasoline (although the alky engine will consume tons more fuel than a gas motor). Here is a short, but interesting study on HP with e85 versus e0.
http://aaae.okstate.edu/proceedings/2005/Articles/556.pdf