I like your thinking, minus the ethonol part, and pump gas being bad, the idea that higher octain fuels burn cooler being a good reason to use them is nonsense, mixture and O2 content of the fuel have FAR more drastic of an effect on temp than octain, and the lower octain fuel is not burning hotter, but faster, and therefore energy is being converted into heat rather than downward movement of the piston, taking power (torque) with it, without timming adjustments a higher octane fuel will lose power.
Race gas is made for a reason, a average passenger car has about a 8:1 compression ratio, and a drag car has upward of 12+:1 that added compression ratio puts a greater stress on the fuel to ignite due to compression, like a diesel, before TDC (knocking) to combat this you need a higher octain fuel that will resist detonation, but you also have to drasticly change not only the base timming but the advance curve and ammount, because the fuel burns slower the spark has to occur earlier in the cycle, so that you reach peak combustion pressure at or slighly behind TDC.
On a small 2 stroke engine, like a saw, ignition timming is key to making power, if your fuel is only 3/4 burned when the piston moves past the point of covering the exhaust port, than you have lost potential energy to heat leaving the exhaust unburnt. without advancing the timming a higher octaine fuel is going to slow the burn down to that point.
sorry for the rambling on.........edited for calrity...
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