Part of the problem with ethanol is that it has a reputation for destroying gaskets and rubber and plastic fuel lines. This was especially prevalent when they just started putting ethanol in the gasoline. Since then, the manufacturers made changes to their products to make them ethanol resistant. However, many of our outboard motors and fuel tanks are very old in years (by automotive standards), and may have been built before they started revising the formulas for gaskets, rubbers and plastics. My outboard is a 1987 model, and I haven't had any problems with it, but I do use only Chevron or Union 76 fuel in it. I run it completely out of gas at the end of each trip to empty the carburetor bowl. I siphon my unused gas into my car tank after each trip, so I can use new gas in the outboard the next time out.
Ethanol was not put into the gasoline to get rid of water. It does do that, but it's not the reason it was added. It was a political decision. We get ethanol from corn. There is a big corn and farm lobby. The US grows a lot of corn, and it is politically popular to have ethanol in the fuel, because it's "made in the USA", and our farmers can survive.
As a fuel, ethanol is inferior to gasoline as it has less energy per pound. So, if you can find fuel without ethanol, it's likely better fuel.