I think you hit on the REAL problem.
A home along the ocean should be building for the worst case scenario not the most common bad scenario.
That 4 million dollar home should be build for a cat 5.
Construction codes do not say what a person can or can not build or where they can live in THIS case, just to the level of quality they must build.
Perhaps what we need is a rating system for individual homes. So a house with a rating of 3 will survive a category 3 with no damage. Thus we get away from the "block" system and go into the personal responsibility system.
Do you live in Florida or have personal experience with hurricanes, risk assessments and damage appraisals?