This isn't entirely correct. It doesn't just burn slightly cooler, the solvency/ability to hold water provides a cooling effect from the ethanol before combustion. Vaporization is key.I discussed this with some technical people I know. Here are some other thoughts
2) Additionally, Ethanol has a lower flame temperature than Gasoline. So, Ethanol doesn't cool an engine more than gasoline, it just doesn't burn as hot as gasoline does resulting in a lower engine operating temperature.