Still doesn't avoid the issue of oil prices, famine+drought, lack of Soviet aid, and stagnation in industrial production that sank North Korea in the first place. Things might be better for the North Koreans but the peninsula as a whole won't see the Miracle of the Han while maintaining a level of totalitarianism on par with or worse than China (due to proximity to US bases in Japan). While the South's human rights record isn't clean, it's come a long way and protests are a common scene in the streets of major metropolitans (particularly Seoul, where there were hundreds of thousands of people protesting against former president Park Geun-hye), something that we don't see in many past or existing communist regimes.
North Korea was economically better off, true, but not dramatically. Gapminder.org has the average North Korean refugee's height as shorter than an average South Korean's (not true before the partition) as early as in the 1970s so there's some evidence that things weren't as good as the Kim regime would want people to believe. The gap between North Korea and South Korea's GDP per capita in the 1960s, when it was the largest, is puny compared to the gap that formed in the 1980s (which has only widened every year).
While Kim Korea might take issue with the Chinese border (Jiandao/Gando and Mt. Baekdu), it still has Daemado and Dokdo as contested regions with Japan (and a regime like the Kim regime depends on having enemies to unite against).
I'd argue it's not clearly that much better than OTL. Overall, it might be better for the 25 million people in North Korea, but it's worth noting that 2/3rds of the Korean people live in the South. An additional 50+ million people would be under totalitarian rule which, though perhaps milder than what is present in OTL's North Korea, isn't likely to be too kind, based on the models of other Soviet aligned states. American presence in Japan means extreme xenophobia and militarism isn't ruled out, the economic issues of the 1980s onward still aren't dealt with, and human rights are definitely not a concern in any case.