From a NY Times [link|http://www.nytimes.com/2007/09/30/business/30ethanol.html|story] from 9/30/2007.
It sounds like a temporary problem. If the price continues to drop, then there will be natural incentives to add more of it to more expensive gasoline, helping to support the ethanol price.
Cheers,
Scott.
(Who has never seen an E85 pump.)