My larger point in this, is that I am not sure the models note the compartmentalizatio of the levee system and how cost/benefit improvements could be made.
I also think people should be let home, with the usual be safe warnings (dont touch power lines)
There's a cost to that, though. When they're not in the affected areas they're not crowding the infrastructure and requiring additional logistical support (e.g., food, water, emergency services). I'm not sure that normal property-rights considerations necessarily apply at the beginning of a serious crisis management effort.
Well, a while back a LA poster noted that they may not have confidence yet that the levees are going to continue to hold, that there may be concern about liquification and weak spots. Remember, even without storm surge, most of the city is still below sea level, so a breach could still cause devastating flooding. I sure wouldn't let people back in until all the levees of a bowl where checked out.