North Korea will avoid using nukes against South Korea because of its physical proximity to South Korea. Other forms of WMD, however, are another matter, and currently stationed along the DMZ in case of invasion, etc.
A nuclear strike against Japan is an issue because the DPRK cannot strike the USA, yet. Furthermore, while Kim Jong Il is "a few peas short of a pod," I agree the likelihood of nuclear retaliation is an extreme case; I envision this happening if, for example, we invade North Korea, etc.
Finally, Somalia and Uganda fit all of the criteria listed: borders, population, etc. Are they NOT failed states?