Ethanol Boosting systems did what you said. They designed an engine specifically to take full advantage of ethanol's high octane property (relative to gasoline). the result is 30% improvement in fuel efficiency while using 5% ethanol (directly injected) and 95% gasoline. Of course, you can blend ethanol with the gasoline too.
http://www.ethanolboost.com/Technology%20and%20applications.htm However, Honda sells two FFVs, in Brazil only, that get comparable fuel efficiency with most ethanol blends (20% to 100%) as with gasoline. They probably pull this off by using variable valve timing to alter compression ratio along with appropriate ignition advance.
http://e85.whipnet.net/flex.cars/honda.ffv.html