I think that there are a lot of problems with producing ethanol from corn as you mentioned. One of the biggest problems is its effects on food prices because in addition to being a food for humans, corn is used to feed livestock as well. Corn is also a fairly energy and fertilizer intensive crop to grow. Another problem is that corn can grow only in specific areas of the US, so transportation becomes a problem when most of the corn is produced in the midwest and needs to be shipped to urban centers that are far away. One counterargument I've heard, however, is that the government currently pays some farmers to keep their farmland fallow in order to avoid cases where too much food is on the market and prices drop to levels where farming is no longer profitable.
In Brazil, however, I there are many who believe that the production of ethanol from sugarcane has been beneficial to the poor because it has taken money that would have formerly gone to foreign oil companies and has instead funneled it to poor, rural, farming communities. Of course, this situation is not directly comparable to the US, because sugarcane give much greater yields of ethanol than corn and a larger portion of Brazil is able to grow sugarcane. Unfortunately for the US, only a very small portion of the US has a climate appropriate to cultivating sugarcane.