Well, yes. It is. Especially when government is clearly at fault.
There's a lot going on in this video, but it all revolves around regulatory incompetence and the unintended consequences of ill-considered policies. There's probably some merit to removing the incentives to rebuild in areas especially prone to natural disasters. But when people rely on a specific set of policies and assessments from federal agencies when, say, spending their savings to purchase their first home, you can't then pull the rug out from under them years later when you realize those policies and assessments were flawed.
This poor family is now stuck with the shell of a house destroyed by fire and a property rendered worthless by bad policy, and all they while they're still required to pay their mortgage and mandatory flood insurance. They're basically being forced to bear the mistakes of the people who made the bad policies they relied upon.
It's telling that the one government employee who took action on their behalf was their representative in Congress, who not coincidentally is the federal government employee in this story with the most directly accountable to the public. FEMA, which has very little public accountability, wouldn't even return the couple's calls, even though FEMA regulations are at the heart of the problem, here.
I'm also impressed by the grace and dignity the couple shows in the video. The refuse to walk away from their mortgage, even though at the moment that's probably their best option. They're still committed to doing the right thing, even if the public officials who allegedly work for them . . . won't.