You're not the only one to figure out the ag-subsidy angle.

It makes plenty sense to effectively strip the sugars from corn production to make ethanol when you're left with the protein feed for livestock.

The problem with your analysis is that, at 51¢/gallon subsidy and an EROEI of 1.3 at best (and perhaps as low as RR's calculated 1.09), each gallon-equivalent of new energy is receiving at least $2.21 (1.3:1) and possibly as much as $6.18 (1.09:1) in subsidy.

There are a lot of ways to save petroleum at far lower cost than even the lowest estimate.  Ethanol subsidies are money down a rathole.

1.3 * ethanol in = ethanol out
1.3 * 3.33 = 4.33
and observe that ethanol out - ethanol in = 1

If 4.33 gallons are produced and there are no other energy inputs or outputs, 3.33 gallons is used to produce the ethanol and only 1 gallon is aviable for something useful. I assume that some of the wasteproducts could be used to something useful but this must be really bad anyway.