I think some people way overestimate him and others way underestimate him. I think he's a human which in some ways has been very strategic and very short sighted. He's a hardcore nationalist and idealist, and is willing to take huge risks toward those goals. But he's also playing a very high stakes game that he could well lose. And I see little evidence that his actions in Ukraine have been anything more than winging it; Russia seems to have been repeatedly caught off guard by many of the events on the ground, including the low local collaboration rate, the willingness of the Ukrainian military to engage in military ops in populated areas, the inabilitity of the small Russian forces and local collaborators to hold ground, the amount of resources needed to successfully resist Ukraine, and whether the EU and US would dare risk Russian anger in terms of punishing Russia or helping Ukraine. In each case, Russia has had to hastily assemble counteraction.
When Yanukovitch fled, Ukraine's military was by all standards broken, the public had no stomach for fighting in their own territory, Russia was still more thought of as a partner than an enemy, joining NATO was a minority position in Ukraine, the EU and US were afraid of doing anything that could antagonize Russia, and so forth. Now Ukraine has been shifting their economy into a war economy, their forces are now veterans (still underarmed, but that could change rapidly), the public by and large fully supports the military action, Russia is by and large hated, joining NATO is a strong majority position, the EU and US have taken direct action against Russia and look ready to accelerate it, and so forth.
So let's say that - as it looks increasingly likely to happen - the US and EU arm Ukraine. Not just a little but, but fully commit to it - tanks, warplanes, antiaircraft, ships, subs, tactical missiles, the works, plus full realtime intelligence data sharing. What's Russia's next play? Ukraine, given enough modern US and EU equipment, could most likely defeat anything but total war with Russia. It's extremely doubtful the Russian public would have the stomach to do what would be necessary to take on and defeat a western-armed Ukraine using conventional weapons. So... nuclear weapons? They could, of course. But they'd instantly become a global paraiah, there'd be so much pressure against them that I don't think even China would leave their doors open to Russian trade anymore. Most Europeans would rather burn trash to heat their homes than pay for a wisp of gas from a nation that's actively using nuclear weapons on an aligned state (and realistically the loss of Russian gas wouldn't actually be that devastating, but it'd take too long to go into why). Not to mention what would happen in terms of internal terrorism/guerilla warfare within Russia, which is already a huge problem among Russia's many ticked off populations, and you can add tens of millions of recently-nuked Ukranians to that list, with pretty much unlimited funding for their actions provided by the US and EU. And Russia is a petroeconomy. Its manufacturing sector is grossly undersized compared to its population, even worse than during Soviet times. There's every reason to think that a fully embargoed Russia would collapse even worse than the USSR.
Putin doesn't want to use nukes, of course. He wants to threaten to use nukes. He wants Ukraine to think that he's actually crazy enough to do it so that they'll drop all future claims on Crimea and turn the eastern portion of their country to be a "federated" (Russian puppet) zone. And you know.... it is a possibility. Raise the fear level enough and people might just give in to the unthinkable.
It's an incredibly high stakes game he's playing, however, with a far from certain outcome.
