Rubbing alcohol also doesn't fix outside booboos. It causes tissue damage, slows healing, and it's use for cleaning wounds hasn't been recomended for years. It's still good for sterilzing stuff or unbroken skin. Just don't pour it in a wound.
So I guess it actually does have much the same effect on inside booboos as it does on outside booboos. It feels like its helping but really it's just doing more damage and slowing your recovery.