Getting back to the original question: What's wrong with what Russia's doing?
I would say that Putin's key miscalculation here was not anticipating the Ukrainian nationalist reaction to his interference with the trade deal that was scuttled on his orders.
Now, the typical Ukrainian 'man on the street' probably didn't have very strong feelings about the trade deal one way or the other. Some surveys (
here and
here) showed a plurality of support for the agreement, but a similar number also favored joining a Russian-led FTA including Belarus and Kazakhstan.
The problem occurred, I think, when Yanukovych admitted that he vetoed the agreement he had supported and negotiated with the EU due to pressure from Moscow. It then became clear to that typical Ukrainian 'man on the street' that the president of Ukraine was not acting on behalf of the voters who elected him, but taking orders from Vladimir Putin. This is what caused the uprising that Putin did not anticipate, and led to everything that has happened since. By being heavy-handed and authoritarian, he managed to alienate the Ukrainian people. His moves in Crimea are going to further turn them against him. Thankfully, no shots have been fired yet, so the it may be possible to de-escalate the situation
if Russia doesn't make any more unreasonable demands on Ukraine. That remains to be seen though.