Why is Ethanol in gasoline?

I talked to someone who has a degree in chemistry and is also an engine mechanic and he said that ethanol is more expensive, has less energy per given volume than gasoline, takes more energy to manufacture it than you can get out of it, and can eat up rubber seals and make your gas mileage worse. So my question is WHY the heck do they put ethanol in the gasoline in California if it makes the car run worse and it makes the price of corn more expensive and it is more inefficient? I don't really see the benefit in using it.