I am a proponent of conversion of biomass to ethanol through my BioConversion Blog so I suppose I should weigh in here.

Your thesis is based on a rather narrow definition of biofuel feedstock as being agricultural.

Add waste biomass to the definition and you start opening up possibilities. Waste has concentrations where people are in urban, agricultural, and forest environments. Convert waste biomass into ethanol - which new, clean bioconversion technologies are accomplishing in pilot programs - and you turn liabilities (corn stover, MSW, rice straw, infected trees, sewage, switchgrass, sulfurous coal, tires, auto fluff, etc.) into energy assets (ethanol and co-generated green electricity) without toxic emissions. Not to mention the positive environmental impact of ridding yourself of the waste.

Don't get hung up on "subsidies." Subsidies are spurring overdue investments that are going to get us from fossil fuel crisis to renewable fuel solutions. Biofuel subsidies are a pittance compared to fossil fuel subsidies with a much greater rate of environmental return.

Add waste biomass to the definition and you start opening up possibilities.

One man's 'waste' is another man's compost for soil fertility.

To destroy weed seeds in your field in a biological way, you can use fungus to 'eat' the weed seeds.   But you need carbon to get the fungus to 'bloom'.   Putting 6 ton of finished compost PER acre (thats alot of compost bob!)

The boys over at magic soil show a way how excessive electrical energy from renewable generation can be fixed into compost management.
http://www.magicsoil.com/

Better make sure your 'plan' isn't destroying the soil food web just so you can keep the lights on and drive the SUV for a bit longer.

turn liabilities (corn stover, MSW, rice straw, infected trees, sewage

Corn stalks are fixed into animal protein in many opweations.  Rice straw and cornstalks can be made into tasty or medicinal mushrooms.  Sewage - Ha!  When one looks at what is dumped down the drainpipes by most people, the seperation of the toxic materials from the non-toxic is problematic.  The toxic crap effects the bio-process based fuel conversion,  and random addition of metals like platinum make sewage an explosive depolymarization methods.

Being optimistic is fine, but just looking at the energy side is a recipe for just adding TO the disaster.

I think that Eric's comment is very important, that many in this group are missing.

Soil health is very important. The biomass in the soil requires carbon to be recycled into it. If you take away that carbon, by converting it to fuels, you may have a recipe for a high rate of desertification.

Ikivo SVG   
"Waste biomass" is unused or transformed primary biomass obtained via agriculture. Thermodynamical laws tell us that you can not get more energy from the waste biomass than from the primary biomass; hence it makes much more sense to use the primary one directly.

Don't get me wrong - if we have waste that we can use - we should do it by all means. But in the end it may turn out a marginal source, limited by our agriculture capacity.

Lumber companies call the roots and branches they leave behind in a cut "waste biomass."  I'd call it mulch, and the little that stands in the way of mountaintop desertification.
WASTE BIOMASS IS PEOPLE!!!

(think "Soylient Green")

That is the amazing thing many seem to miss.
In a totally natural system, NOTHING is wasted.
It may seem like waste to humans, but it serves a purpose.

The more natural-like a system is, the better it operates, because it operates more in harmony with natural laws and processes.

Natural wastes from artificial systems (like agriculture) also serves a useful purpose.  Any divergance from this is simply asking for trouble further down the road.

Sediment
This is the insight that organizations like ZERI are trying to harness.  Instead of single industrial processes with inputs, useful outputs and waste, you have process clusters, where the waste from one acts as an input to another.  Essentially every output is "useful" within the system.

An example might be co-locating a smallish coal-fired powerplant, an algal biodiesel facility, a pig farm, a biodigester and a mushroom-growing facility.  The "waste" stream works like this:

The power plant produces CO2 that is bubbled into the algae ponds.  The pigs produce manure that is passed through a biodigester to produce methane, and the remaining manure waste material is also added to the algae ponds as fertilizer.  The oil is extracted from the algae, and the remaining cell-wall waste is used as a substrate for growing mushrooms.  Following mushroom production, the substrate that has been "cracked" by the mushrooms is used as pig feed.

Out of this cluster you get electricity, biodiesel, natural gas, pork and mushrooms.  All significant wastes get used within the cluster.  Now the devil is in the details as always, but the theory is to mimic natural systems insofar as waste re-use is concerned.

Excellent thinking, GliderGuider. Right you are.