They don't seem to have any nukes to launch, nor the ability to sustain conflict. The only thing they are capable of is provocations and a one-time surprise attack (the artillery probably wouldn't do significant damage, but a dirty bomb snuck across the border would).
Given their escalating fondness of low-level provocations, the option of a surgical strike against the leadership gains appeal over time (but doesn't outweigh the downsides of having to deal with a broken nation afterwards yet).
How do you know this? The CIA world factbook puts N Korea's army at 6 million people. Seems like they have the ability to weather a sustained conflict just fine:
The Russians tried that in Afghanistan - but I suspect that if china has some decent SF like the Spetnaz they could take out the leadership in a decapitation strike and put their own guys in and it would probably work cant see there being much resistance from the local population as opposed to Afganistan.
Consider this. NK probably has some degree of decentralization and/or redundancy in their chain of command. You bet they have a fail-deadly system in place to get their conventional artillery (the ones pointed at the north half of Seoul) to fire in case of an attempted decapitation strike, say nothing of their possible WMD systems.