I don't think the human race would have survived if moderate alcohol consumption during pregnancy was terribly, terribly, inherently awful... I mean, haven't there been plenty of cultures throughout history who drink watered-down alcohol almost exclusively, because it makes the water safer to drink?
I don't drink (don't like the taste of alcohol!), so it isn't a huge issue for me; but I've still had some alcohol in various forms during this pregnancy, and haven't really worried about it. I had a tiramisu at a restaurant once that presumably had liqueur in it; and I cook with wine occasionally, which means the finished product will have some alcohol in it (it doesn't all cook away). Heck, vanilla essence is alcohol-based. :p
I remember reading the case in Spiritual Midwifery where a woman got drunk at about 28 weeks and stayed that way for the rest of her pregnancy... to prevent premature labour. It worked (not forever - the baby was still born early, but not ridiculously really, IIRC, and he survived). I was a little horrified when I read it, but they didn't have labour-stopping drugs back then (according to my mother, who used to be a midwife), so... I guess it was the best option! Alcohol relaxes the uterus. I think that's why midwives often recommend mothers have a bath and a glass of wine in early labour - if it's just BHs, the wine will stop the contractions, and if not, well, I guess it calms the mother down for labour. :p Anyway, it was an interesting story...
ETA: Just thought I'd add, it's not a uniquely US view that alcohol should be totally avoided in pregnancy. My government-issued pregnancy book, here in New Zealand, had a rather insulting "NEVER DRINK WHILE PREGNANT" page in it; there are also posters in my MW's office that say "Every time you take a drink, your baby does too... never drink while pregnant" on them. I'm sure the midwives themselves would be fine with the occasional drink, but the government's official line is pretty strict. (And yet, that same pregnancy book stated that home birth is just as safe as hospital birth for low-risk mothers, even first-time ones! Funny mixture of views we have over here...)