Why would it be fine? If you just cave, you tell Putin that he can take whatever he wants, so long as he threatens to nuke you if you don't let him.
And all this talk about NATO being the "red line" is not particularly believable in context, either - I sincerely doubt that, if Russia threatens e.g. Latvia, US would be willing to risk escalation then if it doesn't do so now.
But the West is too afraid to fight. So it'll keep pushing for sanctions, which it can later point at and say, "see, we did something!"