They started building it in the 80s because they wanted to let
a bit of capitalism in their economy, and undergo some sort of openness like the USSR did. But then Tiananmen Square and the collapse of the USSR happened and they became paranoid and shut down the country, along with the Ryugyong, and NK has been shit ever since. Anyway, Moscow had built such grand skyscrapers in the 50s; NK had full rights for one. Especially if Soviet funds were invested in it.
I believe NK wants to be accepted by the world, to be seen as a real country. Of course, the USA and the West imposes such murderous sanctions on it, that it cannot do this, and its people starve because money has to be put into defence from invasion. The 'war scare' that caused Kempinski to halt progress is nothing but a publicity stunt, but the media does not want people to know this, since it gives them ratings. I have no sympathy for those who blindly accept what the media writes about their enemy. Especially about something as unimportant as a skyscraper that nobody will ever bother to check if they're telling the truth or not.
According to some western sources, average tourism rates (several thousand per year) are still continuing there, so I don't see much reason for it to not be used. Orascom is still working on the podium as well, because I believe they plan on using that space for offices, or something.