Unlike the magazine, ViceTV seems to be fairly respectable in their journalistic efforts. I've seen several of their features as they seem to have been adopted by CNN as outside producers. However, like all media outlets, they have a keen interest in showing the abnormal aspects of their stories. There's no point in telling people that "everything is perfectly normal!" I believe you if you say that they showed this pageant taking place in a small, empty venue, but if they didn't also point out that it regularly occurs in
this fucking monstrosity, then I have to question their integrity. By the way, the first of these pageants was held in this venue with Madeline Albright in attendance.
Again, the consensus seems to be that the whole thing is a bit creepy, but the role is different that what you've described. It's actually a propaganda ploy that they're showing to anybody willing to come and see it; +12,000,000 thus far. It's North Korea's biggest tourist draw now; hence the big-ass stadium.
As for the human rights aspect of it, that's kind of a tricky one. Nobody seems to be particularly free over there, so I wouldn't really say that they're any more or less free than anybody else. However, from what I can see, they might actually have a better lot in life than most North Koreans. By American standards, you could say that they're forced into doing what they do. In a more relative sense, though, they might be absolutely thrilled to have been awarded that particular role.
Again, I'm not saying that you're wrong about it. I just don't think it's anywhere near as bizarre as you've made it out to be, particularly when it's viewed without the filter of standard American values.