It is quite possible to create an organism that could be fed nearly anything and produce a high quality fuel.
But what it should be fed is corn stalks and other waste products, not corn or other foodstuff.
And people should just accept that we are going to pump out every single drop of economically available petroleum and burn it all up over the next few hundred years. Our entire economy is based upon petroleum and almost everything is made out of it.
One of the major drawbacks to any political involvement in addressing a need or solving a problem is the fact that politicians almost always have another agenda and end up using the problem as cover to accomplish other goals.
In the case of biofuel from corn, politicians weren't satisfied with supporting/encouraging programs to develop biofuel in the most efficient and cost effective way. They used the fuel crisis as a way to create an artificial demand for corn as a way to drive up corn prices for their agri-business lobbyist pals and financial supporters.
The fact that it was an expensive, ineffient process and that it resulted in very big price increases to consumers (voters) for food and other products affected by corn prices seems to be of little concern to them.
Remember, both republicans and democrats from President Bush to the Senate and beyond are responsible for this flawed biofuel policy. And politicians of both parties are responsible for thousands of other market altering actions and subsidies (such as home mortgages to unqualified buyers).
This is another good reason why politicians of all stripes should not be trusted to interact with businesses in any way that can affect markets.