The problem is the S Korean president has promised to retaliate this time. So if the North sinks a ship or shells a city, then S Korea responds by maybe blowing something of their up what would N Korea then do? Would they call it even or escalate.
People have to realize in history wars can break out pretty quickly in situations like this. If it did hit all out war for any period of time Obama should use it as a chance to take out that regime once and for all. IMO the big question would be what does China do?