It's certainly plausible that the entire well has been compromised, and probably true that oil companies should not be allowed to drill this deeply offshore. I think the uncertainty regarding the current situation shows that they don't even know enough about the possible results even if this particular disaster hadn't occurred.
However, it's not necessarily true that there's no way to deal with this. No conventional way, but, again, this is why a well like this shouldn't have been allowed in the first place. The oil companies are not equipped to deal with this, and if they aren't neither is anyone else.
The oil is currently coming up, as far as I've heard, in a single location. In theory, virtually the entire leak could be captured. The leak would tend to become somewhat worse over time (due to erosion, basically) but would also probably eventually slow down (due to loss of pressure). I have no idea how much oil might be down there, under how much pressure -- and I'm not sure BP really has any idea, either, quite frankly -- and I'm not sure just how hard it would be to capture all the oil leaking out. Certainly, it would require new techniques and new equipment. So hurry up on that.
Also, relief wells ought to work. They'd give the oil other, safer ways to escape. Frankly, I think other companies should drill any relief wells and get to keep the oil they get, and maybe BP should subsidize their efforts, too.
I hate to say it, but 'the oil keeps leaking out for the foreseeable future' is not the worst-case scenario. Worst-case scenarios include massive escapes of waxy hydrocarbons, like 'small' poisonous and highly flammable icebergs; huge releases of methane, ruining the region for shipping, causing fireballs, and doing the atmosphere no favors; earthquakes due to pressure changes down there; ocean floor collapse, leading to tsnuamis and maybe vulcanism in the Gulf; massive anoxic zones where everything dies; surf on fire; WD-40 hurricanes; toxic clouds; cats and dogs living together . . . .
Eh. Who knows? I guess we'll find out.