Sanctions are blackmail. And - as is well known - giving in to blackmail often leads to more blackmail.
This is the dilemma that we see now developing in crisis around Russia and Ukraine. Putin cannot afford to give in to threats with sanctions as that will only lead to more calls for sanctions on other subjects. So it looks like instead he is raising the stakes in the hope that that may force the Americans to finally get real about negotiations.
Unfortunately it looks like both Kerry and Merkel are completely wrapped up in their own logic that the coup in Ukraine was a genuine and legal revolution and that they simply don't understand that Putin sees that differently.