OK quickly then:
There are a lot of costs to burning fossil fuels that neither the seller or the user pays for, instead these costs are paid for by a bunch of other people. In economics, these kinds of costs are called ‘external costs’.
Some major fuel external costs:
Smog and particle pollution: burning both fossil and biofuel produce smog and particle pollution (‘soot’). Also gasoline vapors from gas stations and refineries contribute to smog. This affects the health and well being of the surrounding area, with smog travelling hundreds of miles. An electric battery/hydrogen car charged from wind/solar/dams doesn’t have this issue; if the car is charged from a fossil/bio power plant it does contribute to smog, though to a lesser extent than an internal combustion car.
Oil spills: Transporting oil (though not natural gas) can have damaging, though not generally permanent, effects on coastal areas.
Climate change: Burning fossil fuel, in internal combustion or electric plant contributes to global warming. Burning bio fuels releases only as much carbon dioxide as was absorbed to grow it, so it has no effect on climate change. Wind etc generation has no effect. This affects the entire world (pretty big potential external cost, then).
Landscape degredation: Hydro power dams necessitate flooding often large areas (see China’s three gorges or HydroQuebec’s projects), usually without the consent of the inhabitants. Wind power installations can affect the views of neighbors, who are not compensated. Large scale bio fuels could require more farmland, resulting in a loss of wildlife habitat (I’m not familiar with any studies of this issue). Coal mining significantly affects landscapes; oil and gas less so, though road building for exploration and extraction can fragment large wilderness areas.
International Relations: Currently regions and countries with large oil reserves carry extra significance in international relations. Some go so far as to argue that much of current U.S. foreign policy and military expenditures is based on securing access to oil supplies.
Now, from a ‘what should the country do?’ point of view, we should really account for these external costs, since we’re all paying for the sick people, hospital visits, etc., even though the person using the fossil fuel doesn’t.
So the question of whether biofuels are ‘economical’ from a country-wide perspective depends on how big you think all these various external costs really are.