The problem lies in the over-simplification whereby ethanol use in general is called into question simply due to its proximity to these two issues. Since, at least at current levels, ethanol production has no effect on corn prices for food, that argument clearly holds no water. However, we are likely to see the argument that ethanol use will divert 3rd world food sources and lead to rain forest destruction--therefore we should not use ethanol.
That is total nonsense, however, as it is confusing the issues as I said above: The problem lies in the over-simplification whereby ethanol use in general is called into question simply due to its proximity to these two issues. Instead of dumping ethanol altogether, we should avoid importing from countries without laws to protect their forests and food sources. In other words, the problem is not ethanol, but rather the actions of those we import from. In fact, I recall reading an article from somewhere in Europe where they were specifically making policy to only import from countries where deforestation was not involved.
This reminds me of the same blanket paranoia and oversimplification that leads to our current "no cloning or cloning research" policy. People are afraid of a variant of identity theft whereby illegal copies of them are being made, or afraid that someone who would use the technology to breed an army of themselves, or other such sci-fi nonsense. First off, cloning doesn't work that way. Clones age at the same rate as normal people and must still be birthed, raised, and mothered like a normal child in the same fashion as artificial insemination. Clones also are not direct copies, they have different personalities in the same way that identical twins do. Secondly, cloning could have led to direct replacement organs for people who need them instead of years-long organ transplant waiting lists for something that might be rejected in the end anyway. Instead, we should have banned the things people object to: namely illegal cloning without consent, cloning in great numbers, or genetically accelerated development--on anyone, clone or not. There are probably other examples of this phenomenon, but this was the first that sprang to mind.