I haven't run much 87 E0 because the pricing is stupid compared to 91. From the little I have used it, it showed similar results.
The issue is that 87 E10 is 84 octane with ethanol to boost. Both E0 octanes are pure gas of that octane. Like I said, E10 is shitier gas to start with so there's no surprise for results I get.
Also, the ethanol creates more oxygen, which in turn creates more heat. The engine compensates by adding more fuel. In a direct inject engine that means not all the fuel gets burned, hence the lower MPG.
This has to be the craziest thing I've read on ATG today (or in a long time, actually). A close second was a user in the EV thread suggested not steering the front wheels of a car.
Ethanol is not an oxidizer. When it is used as rocket fuel it must be combined with an oxidizer to burn. Burning ethanol doesn't make more oxygen or heat in the engine and the ECU doesn't add more fuel to cool it down. Under certain conditions many engines run rich (add excess fuel to the intake charge) but that is completely different from what you're talking about.
Ethanol has a lower energy per unit volume compared to gasoline, that's why you (and everyone else) gets poorer fuel economy using ethanol.