In the original space race, when the Soviets launched a satellite, it was seen in the west as a proxy for an ICBM - the (correct) theory being, that a nation firing a sub-orbital rocket was "interesting", while a nation launching an orbital craft meant they could, potentially, hit "anywhere" (subject to orbital inclination and other similar factors)
Now that the Soviet Union has fallen, to be replaced by "friendly" (yeah, right) Russia, other nations can launch satellites with impunity (China, India etc). Most of them are, if not "friendly" to the west, are at least "not complete and utter fruitbats" (that's a technical term BTW).
North Korea (DPRK), though, is still transitioning from the "complete and utter fruitbat" of Kim Jong-Il to Kim Jong-Un, so that, at this stage, it is hard to say whether the new Dear Leader's plans for satellites are peaceful or not.
Assumption 1: it is peaceful, so an out of control satellite is, as USA, Russia and several others have found out, merely an expensive mistake
Assumption 2: it is deliberately provocative, (we launch a satellite, so an ICBM is easier), so an out of control satellite is... well what, exactly?
Let's not forget that part of DPRK's posturing is directed inwards - their recent "nuclear accident" (http://en.wikipedia.org/wiki/Ryanggang_explosion) - to quote wiki "No neighboring nations have claimed any detection of radioactive isotopes characteristic of a nuclear explosion.", even though their news media hinted it as such, means that even an unsuccessful satellite will still be seen as a "we are a major power" - when broadcast to those in DPRK
So... where from here? DPRK joins the space race. That is still a concern. Does it matter that the satellite failed? Only if it was intended to be "just a satellite" If it was a "proof of concept" for an ICBM, then a wonky orbit is still an orbit