I completely agree -- use 87 octane non-ethanol fuel, run the carburator dry when the generator isn't going to be used for awhile and put in fuel stabilizer. There is nothing to be gained with higher octane, but there is something to lose with ethanol. It does indeed collect water over time. The right stabilizer will help but why take the risk. I've gotten into the habit of using non-ethanol fuel for all my small engine needs.
An interesting sidelight -- I have a 2010 Polaris ATV that was actually spitting raw fuel out the tank overflow, which it is absolutely not supposed to do and which could be dangerous. On my ATV, the fuel tank is in the worst possible spot, right behind the radiator and ahead of the engine. A little research revealed that the vapor pressure of gasoline with 10% ethanol in it is about 10% higher than non-ethanol gas with the same octane rating and at the same temperature. That means there will be more vapor at the same temperature with ethanol gas than with non-ethanol and therefore a higher tendency for ethanol fuel to boil/bubble. In my case, the fuel spitting disappeared completely when I stopped using ethanol fuel.
Brian