The only problem with E85 is that the air/fuel ratio has to be about 9:1 which means worse mileage. But the benefit of E85 is the higher octane, which means that you can run a much higher compression ratio. With a higher compression, that means less throttle to get moving, which could allow the engine to get close to the same mileage, if it is built correctly.
Also, not sure if it is true, but I have heard that E85 is not a clean running fuel, like everyone first predicted.