A geologist from NYC predicted that the location the city was built on made it very vulnerable to even a modest storm surge from a weak hurricane. Irene last year was a warning.
In short, it was the multi front attack of the water that did it. The water built up in Long Island Sound because of the persistent east wind. What is at the end of Long Island Sound? NYC.
The same happened in the Hudson River Basin at the same time. With water coming from both sides the city did not stand a chance.
This guy predicted everything that happened.
http://www.propertycasualty360.com/2012/10/29/nyc-the-most-dangerous-place-in-the-world-for-storOn your last question. You are now seeing the bath tub effect holding the water.
The ineffective seawalls that could not hold back the water are now holding the water in place in many areas.
A great example was LaGuardia Airports runways sitting in 8 feet of seawater with 3 lonely fire trucks sitting at the end of a runway pumping the water over the seawall and back into the harbor.