With that said it's indeed an absurd, asinine, insane and stupid idea to build a city in a large hole surrounded by water. So why do it again?
Having a large (and unproductive) population in an area that will flood over and over is absurd. Having taxpayers pay for rebuilding it does not make sense at all.
As far as the issues you refer to they do not outweigh the fact that putting billions in to New Orleans is A-OK as long as it's not taxpayer money. If the commerical industry you mention is so valuable it does not need taxpayer money to rebuild. In that regard I say rebuild New Orleans. Just use other than taxpayer money and maybe not let FEMA/NFIP sell flood insurance unless the structues are out of the flood plain. The real flood plain, not the pretend ones that FEMA/NFIP have had mapped out that are made up to allow development in areas that inn other parts of the country nobody would be allowed to build in.
I'd go point by point but instead refer you to the end of this piece.
As far as the French Quarter? Maybe have someone like the money bags in Las Vegas relicate it in Vegas. They'd build the thing out of their own pockets. A Wynn-Wynn situation:)