Seems like a bad idea to let Putin get away with murder (literally) every time he throws a tantrum, just because he has nukes. Nevertheless, you have to recognize the dangers of the situation.
Perhaps the most equitable unwind of this would be an immediate return to pre-February borders. The separatist sections of Donbas could then have a UN monitored vote on their preferences. Perhaps even extend that to Crimea. Do not extend that to any sector controlled by Ukraine before Ferbruary. Then, there are the very thorny issues of war crimes trials and reparations for the vast destruction perpetrated by the Russians. Perhaps the deal could be sweetened by a pledge that Ukraine will not join NATO.
I'm not sure Putin is ready for that kind of settlement, yet. It may take several thousand more deaths among his drunken conscript army to hammer him down.