The cunning North Koreans read the "dissing" of Obama as weakness, and also that the Americans who have 30,000 troops in the South would be less willing to support them, because of this incident.
Do not write off Obama. The next two years will see the American economy improving, jobs created and a more determined and less detached Obama. The Republicans cannot hide anymore. Their control of the House make them accountable, and there are the Palin and Tea Party factors also.