Mtbe was basically toxic waste, a byproduct of the oil refining process. Today, all federal reformulated gasoline contains some MTBE, but not as much as the CA version.
The whole deal is a scam. MTBE is a carcinogen, and is finding its way into ground water, and even Lake Tahoe. The oil companies have benefitted by charging more for MTBE gas, and not having expensive toxic waste disposal.
Still, the addition of oxygenate (whether MTBE, methanol, ethanol, or some other compound) has been shown to reduce ozone and photochemical smog, even though MTBE has other problems (formaldahyde, vapor emissions, carburetor fires, and the like). The point is, a free market would allow people to buy some form of RFG if they want it and could ALSO make roll the total benefits and costs of different constituents into price of that decision. It can also be done objectively. If the residents of that area want cleaner air, they should be allowed to pay for it. A single gasoline spec for the nation prevents anyone from competitively benefitting by inventing improvements at lower cost. Why not?