All of Xerxes' points are well taken, however I disagree with most of them. The issue over use of a nuclear weapon by North Korea is still up in the air. I again pose the question: Would North Korea really launch a nuclear weapon at Japan or South Korea? I'd wager a bet that most hostage takers wouldn't actually go so far as to shoot a hostage if their demands were ignored, but the threat that he/she will shoot often gets those demands granted. If the hostage taker were to shoot a hostage then all bets are off and not only will he/she have no chance of getting his/her demands, but most likely he/she will be killed. There is no benefit to North Korea to use nuclear weapons, because the country will just be obliterated in retaliation and then what good has that done?
I also disagree with the statement that North Korea is a failed state. Last time that I checked, the government had a pretty strong grasp on the country, it has clear borders, and a clear population. Sounds like a state to me. Is it a respectable state? No. But, that doesn't mean it shouldn't be treated like a state.
I certainly don't want to sound as if I support North Korea or that I want North Korea to have nuclear weapons. But, if our policy is not to negotiate with terrorists, then why do we continue to give in to the demands of North Korea?