Can you add distilled water to E85 gas to get better gas mileage?

I have been told that the higher the octane level, the gas mileage is worse. If you have water in your tank on regular gas, it runs rough so you add STP or some fuel additive in order for it to mix with the water and burn such as alchohol. So why couldn’t you simply add distilled water to your tank on E85 to get better gas mileage. On my company car, they charted out the expense on E85 versus regular gas and it was just under $1000.00 more expensive to run the E85. E85 I think is 105 octane. I think if they were to lower the octane somehow, the consumer could see the benefit of using it more.