"Based on EPA tests for all 2006 E85 models, the average fuel economy for E85 vehicles resulted 25.56% lower than unleaded gasoline."
E10 use usually results in 2-3% lower mileage than pure gas, though some users rarely report up to 10% drop in mileage. If you are finding 10% less mileage by using E10, you should be looking for a problem with your car.
Ethanol has less energy per unit volume than regular gasoline, so you need to burn more of it to extract the same amount of energy (as in, you need more fuel to get up to speed or to go a given distance). It does have a higher octane rating, though, so if you designed an engine to run only on ethanol, you could probably increase your compression ratio which would allow for improved efficiency and might balance out the lower energy content. Diesel is a great mix of both, which is why diesels get such good fuel economy. Diesels run much higher compression ratios fuel AND have more energy per unit volume than gasoline.
I wonder - do the revised EPA tests use E10 or straight gasoline...