Yes mileage suffers but at least arounf here, E85 is a quite a bit cheaper than 87oct and a LOT cheaper than 93oct, so its either saving money or a wash.
New flex fuel cars are typically over 10.1 compression(some over 12.1) and use variable valve timing in take advantage of the higher octane of E85. The PCM calibration is smart enough to know how much Ethanol is being used and adjust the cam timing and ignition timing accordingly.