And im favor of that
That's because you don't have to pay for it...
New Orleans is an important 'port' but not much of an 'important city'. The city itself was mostly a dump even before the Hurricane. Maybe the waters will wash enough of the slum away and it can be rebuilt 'new'.
It will be rebuilt just like they would rebuild and have rebuilt many a city that lives under the consistent threat of Natural disaster. There are plenty of historic examples of cities being rebuilt after flood, fire, earth quake etc...
Storms of the size of Katrina don't make landfall every year or few years. New Orleans doesn't get hit directly that often. Katrina was a 'record breaker'...