Distributing weapons to millions of starving, repressed people sounds like a pretty good way for them to buy some more problems.
Most of the DPRK military consists of conscripts kept in place by fear. When the bombs start falling and lines of communication are cut, it will be tempting for any unit to shoot their officers and political commisars and run for the southern border. Once we smash up their armor and artillery and send the rest of their military running north, everyone who's left behind is going to have one item at the top of their list... 1) Do not become a subject of Kim Jong-Il again!
The first (or the beginning of) Korean War lasted four months from the time they sneak-attacked the South and steamrollered them, captured all but Pusan, were cut off by MacArthur's landing at Inchon, and got pushed all the way back to the Yalu. Only the intervention by the Red Chinese pushed us back to the environs of the 38th parallel and kept us there until a ceasefire was called. The Chinese aren't very likely to directly intervene today... they wouldn't be happy with a united, capitalist, Westernized Korea on their border, but they also do not want to cut off the Western market for all of their consumer goods, which is an enormous factor in their economy.
Either Kim Jong-Il truly believes the world will back down to him, or he doesn't care. No amount of talking is going to resolve this problem. Nobody wants a nuclear-armed North Korea, and South Korea and Japan couldn't tolerate that any more than Israel could accept a nuclear-armed Iran.
We will have to finish them off, well within two years from now. Otherwise, as soon as they have working atomic warheads and delivery systems, they're going to hold South Korea, Japan, Taiwan, and the rest of the region hostage