They have to abandon the Superdome for all the reasons we're hearing on television.
But as Jay points out, the real crisis begins when those who evacuated come back, or want to come back. They won't be able to live in Greater New Orleans, but they'll want to be nearby for a number of reasons: family, tradition, jobs, or whatever. They may be allowed to return to their homes after the water recedes if just to see what's there, or even recover what they can. They won't be allowed to stay.
Thinking about problems like this in the past, I wonder if we won't see a massive "tent city" emerge on the north shore of Lake Ponchatrain. Eventually, plumbing will come, electricity, paved roads, and other amenities. Before you know it, it will grow into a city, and you'll have a new New Orleans, on higher ground, safer, and rebuilt.
I expect the center of New Orleans will be rebuilt however, since the tourist industry is worth hundreds of millions per year. And it should be restored, because it's an important part of this country's heritage, economically, culturally, and historically. New Orleans is one of the great cities in the history of humankind--as Americans we should all be proud of the incredible music and food that was born and matured there. Yet as other have pointed out, the larger area may not be the best place for 1.4 million people to live.
I spent a lot of time with real New Orleans residents, hard-working nurses supporting their families, or the patients my mother cared for in the VA hospital (where my Dad was also a patient once in a while). I know the character of those proud old guys and their sons and daughters. They're not going to be "assimilated" into other American cities. They would rather jump into the lake than live in some of the soul-less bland cities the rest of us are accustomed to. You have to understand, few cities in the world have the unique character and feel of New Orleans. It is not a box store camp. New Orleaneans will stay in the area. Hopefully they won't have to live ten feet below sea level anymore.