E85 eating seals and hoses is really on true for older cars. Not really an issue with modern cars. Besides, if they were planning on the M3/4 running on E85, BMW would be smart enough to use hardware that is resistant to ethanol.
Either way, it would be easy to modify the new M car to run on E85 anyway. Just need larger injectors and higher flow fuel pumps and a tune. I did that with my GT-R and my horsepower jumped from 689hp to 729hp (at the crank). The horsepower increase doesn't tell the whole tale though. The increase in engine response is really tremendous, almost as if turbo lag was eliminated. E85 is just awesome.
2012 R35 GT-R (559whp)
2008 E90 M3
2007 E92 335i (369whp, 354wtq) sold
2004 G35 Coupe sold