The problem is that ethanol has a slight octane boost effect. If the refiners produce mogas that they know will be blended with ethanol, they can make it a slightly lower octane value. If they make an ethanol free mogas, they will have to blend it to a slightly higher octane value at the refinery. But, you are correct; ethanol in auto gas is one of the dumber ideas the government has crammed down our throats. It was marketed as a “solution” to freeing us from foreign oil imports AND a “solution” to lowering air pollution from gasoline. In reality, it was a vote-getting move to the farm lobby. All those jobs in corn production and ethanol plants are in predominantly agricultural states. The government also make a real blunder with the original ethanol mandate. They required that a minimum volume of ethanol had to be produced and blended into the gasoline supply, regardless of the actual volume of gasoline sold. When gasoline demand dropped, as it did in the pandemic, refiners were scrambling to find a place to put the constant amount of ethanol they were sold. That explains the recent push to raise the percentage of ethanol in mogas as farmers lobby to make more alcohol.