They have the resources to do that, militarily. However, the past several months showed that pro-Russian sentiment is weak in the East. The insurgents did not have the population's support, and the Ukrainian Army was greeted as liberators everywhere where the insurgents were wiped out. If Russia annexes anything beyond Crimea at this point, they will have a guerrilla war on their hands.
I think, direct hostilities perpetrated by Russia will be the beginning of an end of the Putin's regime.
Russia has no interest in any thing west of the Dnieper. It won’t annex Novorossiya; that will become another Kremlin client state linked up to Transnistria.
They’re resigned in Moscow to West Ukie independence. Wasting Russian lives retaking Kiev is not worth it.
This is a replay of Crimea but unlike Crimea, there is no good reason for Russia to annex Ukraine’s east outright. Putin also wants to keep Kiev on a short leash by keeping open the possibility some future Ukrainian leader might decide to join a Russian-dominated Ukrainian confederation.
Guerrilla war in eastern Ukraine is next but this start of WWIII.