There is another side to the "bludgeoned to death with axes and clubs". They took those implements from the american team. So the unarmed North Koreans disarmed several of the Americans, turning those weapons around to kill two officers. That is a massive humiliation, particularly for the types of people selected for DMZ duty at that time. That humiliation was a factor in the american response, but equally it was a point of pride for the North Koreans.
Leaders on both side saw this back-and-forth, realized the emotions involved, and pulled back. That makes the incident a learning experience that, ironically, increased faith and probably defused tensions in the long term. Similar dustups would occur throughout the cold war and continue to this day.