North Korean Threat

So North Korea is preparing to shutdown their nuclear reactors. What I am wondering is how many nukes can Kim Jong-Il make with nuclear material they already processed? 20? 40? Even with just 10, they would have enough to destroy key cities in East Asia: Seoul, Tokyo, Beijing, Shanghai, Hong Kong, and maybe Singapore. With today's world economy tightly interweaved, no one can afford to ignore North Korea's demands now. I frankly don't see why we wasted time and lives in Iraq for imaginary WMD while North Korea built the real thing. Nuts.
It doesn't matter that US and China has tens of thousands of nukes or that South Korea and Japan can match North Korea's nukes in no time. We have something to lose while they don't and that's enough to force us to dance whenever they howl like hungry wolves.