You both make good points, but I based my comment on an earlier post which explained that the land that New Orleans is built on is a silt bed which has basically been washing out to sea for some time. I do indeed wonder if the rebuilding should take place on higher ground.
When we went to NO a couple of years ago, we were told by many locals that they thought the city had anopther 75-90 years before being inundated by the natural progression of the water. If this is anywhere close to true, then they should either do Venice or move out and give boat tours.