Yes they did. But Galveston is not and was not below sea level, it was just not very much above sea level. Still isn't really, but about 15-20 feet higher than it was, at least at the east end.
Galveston was swept by the tidal surge, not by floodwaters that poured in after the surge had breached a sea wall. It's also not built on silt deposits. It's limestone under the fill, IIRC.
Somethin' will have to be done...it can't return like it was...look at FLA, Miss, Ala. how many canes hit them since 2004? N.O. can be exactly the same way...