There has been a thread The new E10 fuel here. I've previously noted the same sticker and posted it in the same thread. Members @daniyalahmed and @KamranAslam posting in this thread have been active on than one too. They should've pointed you over there. Its no use discussing things again and again.
Because ethanol can eat away at fuel lines (both rubber and steel) and valve seats (only on those engines that weren't designed keeping E10 in mind). That's why. Your vitz engine was designed far later than Suzuki F8B, and as you know PakSuzuki won't take the pain of validating their fuel lines or cylinder head etc. for E10.
Ethanol doesn't have properties similar to water. Rather, it is hygroscopic (also called hydroscopic) just like diesel and can absorb atmospheric water. Since water is incompressible therefore conrods can bend (not the absorbed one, but that part which comes out after supersaturation).
BTW, some people really use ethanol instead of water (maybe they also think it is a substitute of water), but that is an addiction.
Due to some technical reason or personal like/dislike?
Press release 3rd July 2010: PSO Launches E-10 Fuel in Punjab.
Not necessarily. However EFI cars are newer (by design) so it means they may have been validated for E10 use. Or those materials have been used in the fuel pipelines that don't get corroded by ethanol.
At least on these pumps.