My understanding is that the only reason you're adding the gas is to make it unfit for human consumption. E85 is nice, but in the end they need a better source, plenty of other things they can use to produce it rather than food stuffs.
You are correct, the 15% is meant to denature the PGA, otherwise it is illegal to possess.
As far as using Ethanol goes, in the long run its a much better option, eventhough we are currently using crops to make it in most regions we need to remember a few things -
1.) This IS a renewable resource.
2.) Ethanol can be made from several things aside from corn, unedible sugars from mexico for example, while certainly not as effective as the method brazil uses, these sugars are plentiful and can be had for a small price.