We have no reason beyond blind optimism and hope to believe that this situation will be limited to the Ukraine.I can't agree more. This is quite the pickle. Putin has drawn a line in the sand. This is such an affront to the international community that I don't see how relations can return to normal, at least not while Putin is in charge. Even Russia's government has requested Putin withdraw its US ambassador, although I'm not sure if he has or not yet.
I don't think this is going to lead to anything kinetic outside of Ukraine, but the distrust that has been simmering underneath the surface is overflowing at this point. Could easily become another Cold War. It's anyone's guess what Obama is going to do about it, but I do know for certain Putin doesn't give a damn because he doesn't respect Obama and he correctly diagnoses the West as nations that are more concerned about political correctness and diversity than growing a pair and standing up to him. Not to mention he controls significant fossil fuel assets that Europe relies on. Scary indeed.
One can't help but think about parallels to the rise of Nazism in Germany. Germany wasn't completely beaten in WW1. Russia wasn't completely beaten in the Cold War. Many Germans felt humiliated after WW1. Many Russians no doubt felt the same after the fall of the Soviet Union. Hitler came to prominence in a campaign to restore Germany's prestige and military. Putin is pursuing a similar course in Russia. Both states became progressively autocratic leading up to offensive military action. Germany viewed areas with ethnic German populations as part of greater Germany. Apparently Russia views areas with ethnic Russians as part of Russia. Germany engaged in military buildup prior to war. Russia has been building up its military in recent years. Apparently the time from defeat to fascist militarism is approximately 20-25 years. 20 years in Germany's case, 25ish years for Russia.
Edit: Oh, and both countries hosted Olympics before getting offensive. History does like to repeat itself.