In this case I meant for the old timers at the auto and Ag parts stores to be my source. There is a lot of disinformation about ethanol (usually from someone either trying to sell a product using fear, or in the oil business and just angry that ethanol exists) and being involved in both oil and agriculture myself I feel like I can be fairly unbiased about it.
Ethanol is free of particulates when it burns, and increases the completeness with which gasoline burns in combination with ethanol, reducing carbon monoxide. Chemically, ethanol works to remove sludge and deposits. This is where a lot of the confusion rests, in that when ethanol was first used, it cleaned up fuel systems and could dislodge deposits in older vehicles that had built up over years of using non-ethanol fuels. This is the only situation I am aware of where ethanol could trigger a problem that I would say was caused by using non-ethanol fuels. Because ethanol can pick up moisture it acts as a drying agent and removes water as it is used. Ethanol fuels also have corrosion specifications they must meet the same as any other fuel.
I don’t know much about small engines, and I know less about motorcycles, but I could see them tending to be less sophisticated and able to respond properly especially to higher ethanol blends. That said, I use E10 in all my small motors on the farm without any issues.
Short version: in my opinion ethanol in combination with gasoline improves the product. Gasoline fuels always have additives, and ethanol is a cost effective way to get multiple positive effects.
Youre correct on some parts, however your sample is also based solely on, as you said, 10% ethanol. The higher blends are where the issues come in. Before you reply with anything negative, keep in mind, I ABSOLUTELY LOVE Ethanol, and would run it on every vehicle if I could, however when converting peoples vehicles to run on it (usually performance vehicles), I always try to give them factual data about it before doing so, because most regret it.
First off, Ethanol creates about 40% less energy than Gasoline, so it requires 40% more to achieve the same power... This means 40% less fuel economy, and burning 40% more fuel with respects to exhaust gas and emissions.
Second, as you stated, it absorbs water (Hygroscopic). This means it isnt safe to store for extended periods of time, especially in your tank.
Third, it can, and will, eat just about anything it comes into contact with, which is why so many companies make Ethanol specific injectors, fuel pumps, lines etc. Does it clean? Absolutely... and likely most new vehicles are setup to where it won't do any harm, however prior to the flex fuel days, most vehicles weren't properly setup for ethanol, and higher blends (beyond 10%) weren't a good idea.
Fourth, as listed in number one, it is less efficient, and computers without an alcohol sensor cannot adjust properly for it (for the most part). Newer vehicles with Wideband O2 sensors have the ability to adjust for about 25%-30% ethanol without throwing a code because they can adjust the fuel trims accordingly, and adjust fueling at wide open throttle. Vehicles without Wideband sensors from the factory, or tuning to adjust for ethanol, are going to run lean when using ethanol. Will 10-15% hurt? Probably not as most vehicles are rich from the factory anyway, however going beyond that, you could be causing a problem. In addition, even if your vehicle can compensate, keep in mind that since it does require 40% more ethanol, often your fuel system may not be able to produce enough fuel as required by the engine to run properly, especially on modified vehicles.
Fifth - The reason E85 is as high as ethanol blends go on the common market is because of the starting issues your car will have. In cold weather, Ethanol can sludge up (think of putting vodka in the freezer... it won't freeze, but it gets very thick). Starting your vehicle can take a bit, and it runs terrible until the engine and fuel lines heat up. It can also have a lot of issues with vapor lock if your vehicle is hot, you shut it off, then go to restart quickly. These are mostly seen in converted ethanol vehicles where tuning and equipment isnt specifically made for Ethanol, but the gasoline additive is strictly for starting purposes.
This may surprise you, but the government isnt running 10-15% ethanol in your vehicle because its cleaner, or in any way superior, they do it because its a cheap way to boost octane content. Ethanol does have an octane rating over 110, so even a small mixture is enough to boost octane levels. You will notice in states like Nebraska and others who have 0% ethanol fuel next to 10% ethanol, that they may have the same octane rating, but the non ethanol fuel is always more expensive.
Now with all the negativity in mind, Ethanol does have a lot of incredible benefits, although most are only seen by vehicles running superchargers/turbochargers, or extremely high compression ratios.