It's not a matter of "should we or shouldn't we." It's a matter of "can we or can't we."
As others have pointed out, the city will be uninhabitable for months (my best guess is at least eight months). After that, how many people will return, since they will likely have established themselves elsewhere? How many will rebuild their homes? How many small businesses will try it again? How many national chains will want to rebuild? How many insurance companies will want to insure them if they do?
New Orleans is finished as a major American city, IMHO.
good pointed questions about who will rebuild N.O.
I do agree with you that it is highly, very highly, likely that N.O. is finished as a major American city, at least for this century.