I was in agreement with much of what you wrote until you wrote this ^ .
The Donetsk basin is very rich in mineral resources. (that, I bet, are more important to Putin than the people).
Stripped of Crimea, and the Donetsk basin, Ukraine will be far less prosperous than otherwise.
I think this is the reason for Putin's change of strategy.
He had hoped that the Eastern revolt would spread throughout Ukraine; that didn't happen.
He then banked on intimidating Ukraine, with the idea that the West would abandon Ukraine, like in 2014.
It seems that is not going to happen, so he is now going to consolidate his gains, rahter than engage in a very costly conventional war.
Recognise the new Republics, move in "peacekeepers", before holding plebiscites in each, that will vote (unsurprisingly) to rejoin Russia.
The only way that Ukraine can avoid his ambition would be to wage a war of aggression against the new Republics. Ukraine will not be able to convince the West to back a war of aggression.
Of course, Putin can then claim "Casus Belli" to defend the Republics.
Sadly, slowly, Ukraine will wither and die the death of a thousand cuts.
