As KelpKid pointed out, for most GA
aircraft, water absorption and component incompatibility are big issues for ethanol/gasoline blends.
And that could be dealt with if there was some point - change some parts, and use fuel injection, and you're good.
The problem is that ethanol has a much lower energy density than avgas. Gasoline contains about 46MJ/kg and 34MJ/l. Ethanol does 30MJ/kg and 24MJ/l. So on a weight basis (and most small airplanes are pretty weight limited as is), you're taking a 35% hit on range, and on a volume basis a 29% hit on range (the latter being a limit imposed by the physical size of the fuel tanks, even if weight is not an issue).
On a car, which typically has much less fuel on board, and much looser performance limits when it comes to weight and range, it makes little difference and ethanol is quite practical.
Now you *could* design airplanes to run on ethanol, but they'd have to be bigger, and more expensive.
That being said, for the tiny, tiny volume of avgas consumed in the world, it's just not worth it.
Going diesel is in many ways a much better idea. First, you can burn Jet-A (which is widely available*, and produced in vastly larger quantities than avgas), and while the potential energy in Jet-A is slightly less than gasoline on both a mass and volume basis, the efficiency of the engine is higher so that you actually get more useful energy out of a given mass and volume of fuel.
*And remember that outside of the US, Canada, Brazil, Australia and South Africa, there are only a handful of countries where avgas is commonly available, and then only at considerable expense.