So, if an arsonist sets fire to your neighborhood and the state and federal government swoop in and provide disaster relief to you and your now homeless neighbors that somehow dismisses liability for the arsonist who caused the damage?  Makes no sense.

Sovereign immunity has never been a magical shield for governments.  Read up on the specific inclusion of a waiver to suits and establishment of a arbitration board reference the Iranian revolution and hostage crisis -- the fact that such had to be specified in the Algiers Accords demonstrates that the default legal position is that US citizens *can* sue foreign governments.  The Obama administration was trying to ban citizens that right, not defend an existing legal precedent.  Congress in this case upheld the law, rather than changing it.