The Dutch media and experts are blaming local authorities and the Bush administration for the huge damage that is done. It seems that funding the wars in Afghanistan and Iraq coursed cuts in funding in protecting Americans at home.

Netherlands 1953
We as Dutch know how dangerous under funding water protection can be. We were hit by a huge flood in 1953 in which 1856 people died because we neglected our dykes. Because of World War II we lacked the money.
New Orleans is protected by a series of flood walls called levees that help to hold back nearby Lake Pontchartrain, which in turn is connected to the Gulf of Mexico. Parts of the city sit several metres below sea level. And the system’s 565 kilometres of walls were built to withstand only category-3 hurricanes. So a direct strike from a severe storm has long been anticipated as one of the worst natural disasters that could befall the mainland United States.
The levees could have been higher. The New York Times has reported that the estimated cost of protecting against a category-5 hurricane, the highest on the scale, is $2.5 billion. The natural marshlands that protect New Orleans from surrounding waters could also have been protected from degradation. A 30-year restoration plan, called Coast 2050, was published in 1998, but it put the bill at a staggering $14 billion. Damages from the current flooding are expected to run to tens of billions of dollars.
“The United States had had a really long run of good luck with hurricanes. Lots of building decisions were made thinking we would continue to have the benign conditions of the 1970s and 1980s,” Willoughby told news@nature.com. “Unfortunately, ‘Don’t worry, be happy’ is not a very good philosophy for dealing with this kind of thing.”
Read more: www.nature.com
Dutch water managers tell us how they were invited by American lobby groups the past years to help them to inform Washington how critical the situation already was. Local authorities took a big gamble and choose to spend their budget on more popular and for the public more visible projects and needs. Washington was the last in line to push their demands aside. It seems like the Bush administration needed the money for more urgent matters, Iraq & Afghanistan. Bush cut the critical water and marshlands protection funding for the region by 50% during his terms.
The harsh conclusion is that the devastation in New Orleans and the loss of human lives may have been prevented if the former governor of Texas paid more attention to the direct safety of his former neighbors.
update: this article explains why many people stayed and became victim of the floods.

In reaction to your update: i’m reading on some sites that by the time city and state officials started telling people to evacuate the train and bus service had already shut down in new orleans and most of the rest of the state.