Donbass can not hold its own against Ukraine? Militia have developed spearhead groups to break heavily fortified Ukrainian defences. Like at the Airport and now in the Debeltsevo pocket. This has resulted in losses for the militia true, but nothing in comparison to the unheard of casualties suffered by the Ukrainians.
Russia must support Donbass for it to survive? Russia cannot abandon the Donbass for political and sentimental reasons. The same can also be said for the rest of Ukraine, the ties are great. However, even in the unlikely event that the militia should lose and the Donbass be defeated, Russia has a modern, capable armed force ready to defend its territorial integrity.
As long as Russia continues to support Donbass, sanctions stay? Sanctions commenced when Russia reabsorbed Crimea. Even if this hadn't have happened, US policy towards post-communist Russia has been confrontationist since the mid-1990's and would have presaged eventual sanctions anyway. What is happening in Ukraine is just part of the wider geopolitical battle taking place between the US/EU and the BRICS countries.
Russia cannot allow Donbass to take significant new land anymore, as it would trigger new sanctions, as Russia would be clearly involved? Since the so-called ceasefire in September the militia have added several hundred square kilometres to their territory in positional struggles against an always probing Ukrainian army. The hostilities between the Donbass and Ukraine are an internal Ukrainian issue, a civil war. The Donbass is opposed to the unlawful regime that was brought into power through US and EU sponsorship back in February 2014.
Russia cannot afford to abandon Donbass, it would kill Putins popularity? True, but not Russian politician in their right-mind would go against overwhelming national sentiment in support of the Donbass in their struggle against the Kiev junta.
In the current situation, since Kerry called in favors and murdered the oil price, Russia economy is in jeopardy of a total crash, setting a danger for Putins popularity? This is a very strange one because the part of the world oil patch that has been most damaged by the nearly 50% drop in the oil price has been the American shale oil plays. If Kerry really could manipulate the oil price, which I highly doubt, then it has backfired badly. As for Russia, it's true it will suffer as a result of sanctions, but the Russians are used to hardship in a way most Americans aren't.
In conclusion, the Donbass militia are flexing their muscles, they are not the weak force that confronted a then much stronger Ukrainian army back in July and August 2014 and still prevailed. Also, Putin is losing patience with the Kiev junta, with whom he has tried to broker an honest settlement that would keep the Ukraine nominally intact as a country.
This is the reason the Donbass had not gone on the offensive since September 2014, until that is when the Ukrainians broke with it in January 2015. Now the junta either need to sit down with the political representatives of the Donbass republics, the DNR and LNR, and forge an ironclad agreement, or Putin will no longer intercede in holding the Donbass republics back from letting loose. Each day that passes makes things worse for Ukraine.
However, because Kiev is not really in control of the situation either on the battlefield, or in the diplomatic sphere, beholden as it is to its US and EU sponsors, I believe the war will be resolved in favour of the Donbass through military means, probably by the end of next summer.