You are absolutely right that there are other sources. Any starch/sugar can be fermented into ethanol. From reading I've done on ethanol energy balances, other crops would be better to grow for ethanol purposes, especially switchgrass for cellulose ethanol production. However, the details of that process are still being worked. In the meantime, corn is one of our biggest food crops here in the US (and the US is the biggest worldwide producer since it grows so well in the plains) and the technology to make ethanol from it is well understood.

Also, I think from a marketing perspective, it is an easier sell. Imagine GM's "Live Green, Go Yellow" campaign with Sugar Beets instead. "Live Green, go dirty brown". Maybe you'll get some real alternative energy freaks on board, but good luck getting John Q. to buy a "sugar beet" powered car.

I think ultimately, we'll see a switch to other crops and possibly other alcohols besides ethanol (butanol, etc) that wouldn't require a specially modified car. What that would require is legislation that doesn't single out "corn ethanol" for benefits, but "biofuels" instead so that the market forces (price, technical merit) can decide which alternatives will win. Unfortunately, we may just see lobbies push in corn ethanol. Though with BP/Dupont in the biobutanol market, there could be some force there too.

-Jim