Can they even reach the largest cities outside of possibly LA?

Probably not, and if so, probably only once or twice they could launch such a long range missile. ICBM technology is held by few nations, North Korea isn't one of them, yet. They have tested a long range rocket when they launched the satellite, but that is a far cry from having a guidance system capable of being accurate on the other side of the globe, and attaching a complex uranium triggered warhead to it that will detonate properly. Also, Russia and US and China have multiple warheads on their missiles, which helps defeat ABM (Anti Ballistic Missile) systems. NK has never tested such a thing. We have Aegis ABM boats parked off of NK right now, and news that another one was brought in just yesterday. We have them parked off Japan, Quam, and other locations across the pacific. If the missile makes it this far we have complex ABM systems in Alaska, and if it makes it past those, we have even better systems on the mainland US from places like North Dakota, Washington, and California. So no, I don't think they pose a single threat to us at this distance. It's just a bluff and an empty threat. And even if true, we would most likely shoot their primitive rockets down. We're also working on ABM laser systems to destroy incoming missiles...

Couple articles: One about the Aegis system, and one about more general ABM. You'll notice the third article talks about how our defense is mainly for shooting down primitive ICBMs and from countries who aren't armed to the teeth with them. Defeating a full on onslaught from say, Russia, would be difficult, as their missiles have baffles and decoys to break through any missile defense shield, and their missiles are so numerous at best we'd just reduce the number that land, not defeat them entirely. ABM defense is tough, because the more ABM batteries you install, the more nukes and better missiles everyone else will try to aquire. So a base system to take out a few nukes from rogues states with less than advanced capabilities, like NK, is the ideal goal.

http://en.wikipedia.org/wiki/Aegis_Ballistic_Missile_Defense...

https://www.wsws.org/en/articles/2013/03/16/kore-m16.html

http://en.wikipedia.org/wiki/Missile_defense_systems_of_vari...

To be honest, I'm sort of excited at the prospect of this system collapsing, sort of Fahrenheit 451/Fight Club style. Everyone would get to start over, and I imagine no one would care if I paid back my student debt.

No, that wouldn't happen. What Fight Club failed to tell you is those banks have multiple data centers. It's not centralized. Even if all of the bank buildings were destroyed, they still have a DR datacenter, and maybe a Hot DR site, and if those get destroyed they have third party stored tape backups to restore from, and trust me, they have a DR (Disaster Recovery) plan to have it all back online within 48 hours. i work in IT infrastructure in finance, trust me, we're prepared to keep and restore all of our data should the country get attacked in a massive way, but more likely, to hedge against mother nature. When I see that scene in Fight Club, I laugh and say, "Call all the infrastructure staff, time to enact the DR plan!"

I enjoy the idealism of the sentiment of your post, but it won't happen. Life would go on as is even if a couple major cities were destroyed. It would be devestating, but there would be no "starting over" for us, our debts, or our work life.