The high cost of fuel efficiency and the decline of common sense

From the Hellava Job Brownie Department comes this assessment of ethanol additives from none other than the U.S. Energy Information Agency, a well known, right wing, global warming denier web site.
EIA has adjusted its estimates of the energy content of retail motor gasoline in the Monthly Energy Review (MER) to reflect its changing composition. Ethanol and other oxygenates, which have lower energy content than petroleum-based gasoline components, have seen their share of total gasoline volumes increase from 2% in 1993 to nearly 10% in 2013. As a result, EIA's estimate of motor gasoline's average energy content per gallon has declined by about 3% over this 20-year period.
In other words by decreasing the energy value of gasoline, at great cost to the taxpayers vis a vis ethanol subsidies and to motorists through higher prices at the pump by 10%, the all knowing, all caring, government in Washington has managed to decrease miles per gallon of gasoline by 3 %. Wouldn't it be cheaper to just water down your gasoline?