It's the worst place you could think of to build a city -- except for anywhere else nearby.
And a city near the mouth of the Mississippi is essential. The Mississippi is navigable by barges I believe as far as Minnisota. A port is needed relatively near the Gulf to transfer cargo from river barges to ocean-going ships.
I spent some of my school years near N.O. I remember how we were taught the site of the city was chosen to give it some measure of protection against hurricanes. The ironic thing is the builders were right; the French Quarter - the site of the original settlement - was largely spared by the flooding.
So, yes, New Orleans should be rebuilt. However, we should rebuild it in a way that addresses the way current flood control structures have damaged the delta.
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"...students of traffic are beginning to realize the false economy of mechanically controlled traffic, and hand work by trained officers will again prevail."
Wm. Phelps Eno, ca. 1928