I got the kydex sheath...I could be wrong, but on a knife that size, I could jam the knife into it and it might come out the side instead of staying in the sheath. I tied it down to my backpack on the shoulder strap, and a leather sheath would bend, making the knife coming out the side a possibility. The kydex won't bend much at all.
Yeah and the Ka-bar 7" blade is not something you wanna stick yourself with.
The kydex sheath is super nice. The knife locks in when fully inserted, similar to a handgun with the proper kydex holster. It was worth the extra $20.