A few hours ago I might have agreed with you but have been looking at satelite photo taken yesterday. Uptown New Orleans, Meterie, and all along the River including the French Quarter are dry. If they slow the flow of water and manage to stop it coming in from the 17th Street Canal this is pretty darn good and demonstrates that less than 80% of the City is flooded (I'm not counting Meterie where I grew up, only the City). It could be the City goes back to being smaller but I do believe it will come back, there is just too much good stuff there. Besides all the port facilities on the River, which are probably not that bad, its better to rebuild than relocate.
Years ago we helped the Dutch design their dykes perhaps they could now help New Orleans with their levees.
SOmeone mentioned at work today that the design had already been made but never implemented.