My reading of it is different. Imo Putin got exactly what he planned. Remember that when Russia was annexing Crimea, breakaway Donbass "republics" also asked to be annexed, and Putin categorically refused.
In my opinion Putin's plans were:
1. Completely annex Crimea - needed for strategic naval reasons. Accomplished by regular Russian army and special forces "surge" in the region. #1 accomplished according to plan.
2. Create a frozen conflict in Kharkov/Donetsk/Luhansk, similar to Georgia and Moldova, so that Ukraine never joins NATO. Simply annexing the East and leaving Western Ukraine to join NATO was not the strategy in my opinion. #2 was not easily accomplished. Putin relied on the native Russian population in east Ukraine to accomplish this "on the cheap", but after that failed, he had to trickle in Russian forces to maintain "parity" between Ukrainian army and insurgents. The key to frozen conflicts is to have neither side able to completely take over, and after the Ukrainian army defeat at Debaltseve, you see Putin sharply pulling Russian troops back and all of a sudden starting to abide by Minsk II.
No. Russia doesn't want to have Crimea as a site of frozen conflict. They want a stable Crimea as an integral part of Russia, so they can maintain a full fledged naval base there. They wouldn't have constructed Europe's longest bridge there just for it to become a conflict zone. They consider Crimea as a historic Russian territory. At this point, they will never relinquish it either (short of a war), no matter the sanctions. As one American pundit put it "They will give up Crimea the day after US gives up Texas to Mexico."
Russian annexation of Donbass would put an end to Russian expansion in Ukraine and would have caused a much stronger reaction in the world than the annexation of the Crimea. Let's not forget that even the direct use of the Russian regular army to strike to the rear of the Ilovaiskaya grouping of the Armed Forces of Ukraine (August 2014) caused a very tough reaction from the United States - the collapse of world oil prices. Obama, I think, agreed on such actions in advance at the end of April 2014 during a short visit to the Sauds. These actions of the States were not declared as a new sanction against Russia - but in Moscow they should have taken it as well. It caused an economic shock in Russia. Its GDP eventually fell by $ 1 trillion per year, that is, by 40% (2013 - 2.3 trillion, 2015 - 1.3 trillion).
The ruble exchange rate to the dollar fell by half. The revenues of the Russian budget collapsed, and it was covered with big holes. It must be said that so far Russian GDP has not even come close to the level before the annexation of the Crimea. In 2018, it amounted to 1.6 trillion dollars - against 2.3 in 2013
Therefore, the Kremlin was forced to make radical adjustments to its "Ukrainian project", as the initial project collapsed in Feb 2014 as good as modified one collapsed in Autumn 2014 when the oil price fell down from 115US$ per barrel to 38-40US$.
And it seems to me that you forget about another motive for Putin, which is extremely important for understanding the situation. Putin's rating after the annexation of the Crimea among the Russians soared to the limit - to 83%, though it fell down sufficiently before that.
And if you remember that the relationship between Russians and their government can be called in one word - paternalism - it makes it clear how important this rating is for that Russian authorities and for maintaining Russia in unstable equilibrium
Annexing Donbass by Russia meant that Ukraine’s Ukrainian project would have to be curtailed. To begin with, Russia occupied only half of Donbass in 2014 - that is, half of Donetsk and Lugansk regions. Moreover, in the summer of 2014, the Ukrainian army returned Slavyansk, Kramatorsk and Mariupol (with half a million inhabitants in the city). In addition, Ukraine would have to wage after annexign of the Donbas by Russia already with the regular Russian army. And to fight directly with an aggressive nuclear power is absurd for Ukraine and very risky for Russia itself.
Let me remind you that over the past 100 years the Russians practically did not wage legal wars, except for the Second World War - and even there they are counting their participation in it not from September 17, 1939 (Russia's entry into the Polish campaign), but from June 22, 1941.
Instead, Russia's non-recognition of the annexation of the occupied part of the Donbass allowed Russia to wage an exhausting hybrid war for Ukraine. Along the way, exterminating a significant part of Ukrainians in it, whom she recruited in the Donbas. That is, knocking out the labor there that Ukraine will need when the war ends.
Donbass - the most important Ukrainian industrial region - suffered great damage during the war. Equipment of a number of enterprises was exported to Russia, most of the rest were looted, many mines were flooded with water.
In all the eastern regions of Ukraine including Donbass the Russians are an ethnic minority, second in numbers to the Ukrainians. Only in Donetsk itself the Russians are slightly more than half. I talked to people from the Donbass - there are a lot of them now in Kiev. And all of the refugees from the Donbass in Ukraine are now more than 3 million. Approximately 6-7 times more than the refugees from the Donbass who remained to live in Russia.
So, they told me that many of those from Donbass who had fled to Russia, then returned. Russia turned out to be sufficiently different from what they were shown on TV, and disappointment in it is, perhaps, their main impression. I have to say that before the war the standard of living in the Donbas was quite good.
Russian military theorists even before the start of the big fighting in the Donbass in summer 2014 described in detail the tactics of
hybrid warfare. They call it a
terrorist war. And indicate its main goal - the economic destruction of the enemy state. Putin now pursues such a goal during his war in the east of Ukraine.
As for the Crimea, as I said, the main purpose of its annexation was to raise Putin's rating. Rating, which before it began to fall noticeably. The second goal is to push the Russian military bases closer to the NATO countries. Let me remind you that from the Crimean airfields Russian aviation tried to bomb oil fields in Romania in 1941. Crimean project is very expensive for Russia. Not only by the huge losses due to reaction of the West and especially for the story with the price for oil. For Ukraine, Crimea was subsidized - about half of its expenses were paid from the Ukrainian budget.
For Russia, Crimea is subsidized by approximately 85%. Russia spends a lot of money on the Crimea in order to show the whole world that it lives under the Crimea better than it does under Ukraine.
I am not sure that many of Crymeans are happy at the moment. I looked through live cameras on the Crimean coast in 2015-2018. And compared the number of tourists there in the summer season with what I saw there until 2014. We went from 1990 to 2013 1-2 times a year to rest on the Crimean coast. So - the number of holidaymakers there has decreased 3-4 times since 2014, and some resorts even during the peak season looked deserted on webcams.