What made Sandy devastating was its size (1100 mi across, the largest recorded Atlantic Hurricane) and that it was stalled in position by two high pressure systems. Even the storm surge was significantly lower than that which hit the Gulf Coast with Ike or Katrina.
However, the area was not set up for a storm of that intensity, and there was a lot of high-dollar real estate built on barrier islands. New York also has lots of infrastructure which is below ground and subject to flooding.
I'm not minimizing the effect, just saying the storm intensity was not high enough for a CAT4 (be thankful, the damage would have been far worse).
Sandy hit just before high tide on a full moon night.