The have a beautiful coast line, however, it still needs work. The lack of jetties, detached/floating breakwaters, groynes and seawalls is going to cost them in the long run. The city is still in its infancy so they may be planned- at least one hopes so.
For comparison:
http://maps.google.com/maps?client=ubuntu&channel=fs&...
http://maps.google.com/maps?f=q&source=s_q&hl=en&... (scroll along the coast)
http://maps.google.com/maps?client=ubuntu&channel=fs&... (nice example of erosion)
http://maps.google.com/maps?f=q&source=s_q&hl=en&... (prime example of good coast protection.)
Here is a good example for what is in store(area of Dubai): http://maps.google.com/maps?hl=en&q=google+maps+dubai...
Here we can see erosion(/) and building(\) taking place. Those "palm" islands are not going to stay that way forever.
After looking more into it, here are some articles about the risk their beaches face.
http://gulfnews.com/news/gulf/uae/environment/saving-dubai-s...
http://www.dubaipropertycrash.com/wp/2009/02/tsunami-dubai-p...
http://www.gsd.harvard.edu/research/publications/hdm/back/27...
http://humanitieslab.stanford.edu/UrbanSustainability/111
http://www.cnsm.csulb.edu/departments/geology/people/bperry/...