Uhm. Being MORE functional than a wreck doesn't mean it's functional. When your economy begins to heavily rely on barter, functional isn't the word I'd use.

And that somewhat repressive part? Yeah not so much.

Part of the reason the USSR collapsed was because it was trying to become less repressive and all the problems came tumbling out.

Now out of curiosity, why exactly do you feel like the only options are the repressive multi-ethnic state and the cleansed nation-state? There is room for middle ground. The problem we're running into with that area is that none of the changes are organic.

I have this theory if the tsarist Russia was allowed to slowly evolve, maybe it'd be nowhere near the state of the UK (I'd imagine it's be a constitutional monarchy type) but the structure for people's rights and other values we find important would be much more stable. (Not to mention they would have gotten to skip the joy of Stalin.) Course the communists preferred to make a big crazy fuss and destroy that particular path to freedom and democracy. I'm not sure at this point we can do anything but attempt to keep human rights violations on check, mind Russia's hungry maw and wait patiently for all those countries to find their way.