Flooding is always going to be more damaging than wind; there are very few buildings that can be built in Louisiana that are cat 4/5 stable because cat 4/5 stable requires tying to bedrock. There's no bedrock to be found in that area. (And while I agree with you that this war we're in is a stupid and immoral waste of resources, the issue is housing, not war. Please don't argue from a false choice.) But even if bedrock could be located, as long as there's a risk of flooding when the levees break, there's no way to build perfect housing. More on this below.
I've been following this concept since Katrina; I volunteered as a researcher to put together a Bungalow in a Box concept built on the Sears Craftsman Bungalows sold in the first part of the 20th century. (We couldn't price them low enough to be practical, unfortunately.) If you look here:
http://www.mississippirenewal.com/info/dayJan-11-06.html and here:
http://www.newurbanguild.com/ you'll see a far more in-depth profile of the cottages. They're built as temporary housing for 2-4 people, and permanent housing for 1-2 people or business space for the long term. Good use of space is critical in these designs. There are loft beds over the window seats and a lot of built in features. If a family doesn't have a lot of stuff (which most of the families these are built for don't) 308 square feet used well is more space than 800 square feet used poorly. (For what it's worth, my house started out at about 400 square feet back in the twenties, and has been added on to twice, once to provide a bigger kitchen and dining area, and once to add an office space. The original house was intended for a family with three children. Most of the year, we live in the 400 square foot original house.) These are neighborhood houses, where kids play in common areas and people congregate over grills and on porches. They're for neighborhoods where an eight year old can bike to a store to buy a popsicle.
The cottages can be built in 20 days, in a barn and hauled into place. The trailers that FEMA bought take 35 days to build and cost twice as much (and from what I hear, are shoddy as all hell.) The FEMA trailers are meant to be disposable - they're supposed to be landfilled in 18-24 months. These houses are meant to be the basis for add ons, to become granny apartments, or housing for couples and single people in the future. In a mixed use neighborhood, they would serve perfectly as a small clinic, a dentist's office, a hair salon, a tailor's shop, or small store. They're the difference between New Urbanism and single use sprawl. They're meant for medium density, community based housing.
These cottages can definitely stand up to Cat 2 hurricanes - that's what they experience just being transported from building site to lot site. (70+20 MPH winds, bumps, jolts, stops - and it survived without even cracks in the sheetrock!). I would back of the envelope guess that these would stand up to 120 MPH winds better than a trailer, if only because these would tie better to their foundations. I know that the trailers that are currently in use are not hurricane stable, and if there is a serious hurricane in this upcoming season, the region will suffer damages akin to tornadoes in the midwest - insult to injury, in other words. For what it's worth, my partner works for an insurance underwriting company that specializes in natural disaster insurance (range fire, earthquake, hurricane and flood), and they are refusing to insure any of the FEMA trailers that have been put on foundations... and this company will insure houses in earthquake country built on sand...
If these cottages are built with metal foundation strapping and use spray adhesive on the roof sheafing, they will be able to take 120 mph winds without a problem. (University of Florida, Windstorm Damage Mitigation Center, 1999). We've learned a lot about materials and building science in the past 100 years; we can improve on the materials and concepts while preserving the look and feel of an historic community.
As for flood versus wind resistant construction: While elevated block construction survives flood damage better, they tend to lose their roofs in high winds due to implosion thanks to significantly unequal pressures. Wood frames flex and breathe better than block, and so survive wind damage better, but tend to be significantly damaged by water. There are very few structures that can survive both types of damage. (elevated Bucky ball houses are about it - and for some reason, no one likes geodesic domes...)
As for being a permanent part of the architecture of the city, they are a start for replacement housing that is culturally, environmentally and historically appropriate to the region. They're based on shotgun houses, and shotgun houses came from Haiti after the Haitian revolution, when the Free People of Color started building their settlements. If you look into the actual architecture of the city, architectural historians have linked the shotgun houses to West African housing of the 17th, 18th and 19th centuries.
Once in Louisiana, the architecture changed to suit the environment: houses with high ceilings, deep porches and big windows have excellent air flow-through and cooling properties; houses on piers are safer in floods and cooler in the summer; the double parlor of the shotgun house allowed for maximum flexibility in sleeping, and the plaster and lathe system (which is best replicated by fibrous concrete for its fire safety and water resistance) meant walls stayed cooler. Early shotgun houses have Caribbean carvings; later houses adopted Victoriana. The cottages take advantage of several of these properties; the thin house plans that are soon to be available will be adapted shotgun houses that include all of them.
Shotgun neighborhoods were developed for a non-car world, where people walked and used public transportation to get around. The long, narrow lots are much easier on a walking population than are wide lots. Double shotguns make the best use of materials, and camelbacks are relatively easy to add on to any shotgun. And it was the shotgun house that invented the front porch, something that has become a very important part of New Orleans culture and climate.
The average single shotgun house is about 20 feet wide and 40-80 feet deep; double shotguns are twice as wide and the same length. The house pictured above is a starter, not a final product. However, if getting out of a motel and getting home meant my kids had to have loft beds and I had to use a tiny kitchen for a year, I'd be all over it.
Please keep in mind that many of those displaced are living in even further cramped quarters - four or six people to a single motel room, doubled up in two bedroom apartments or small trailers. No, these houses are not going to handle the Lazy-boy recliner and big screen TVs... but while one is rebuilding the main house, who can afford such things? Isn't it better to put a community back together so that children have their families and chosen kin just down the street, so that churches and schools and shops have their client bases back, so that the community begins to mend? Yeah, cramped quarters suck. But being stuck 1000 miles from home and all you care about sucks worse.