This is shameful. With that said, there's a chance it may work. Actually, it may even make sense.
As far as federalization goes, it is clear that Ukraine can't function as a centralised state given the fact that some regions are populated by ethnicities other than Ukrainian. A degree of autonomy may make that work. Either way, trying to tie up an ethnically diverse country into a centralised state always leads to disaster. See: Yugoslavia. Switzerland is an excellent example of a federalised state with clearly divided ethnicities, and to a degree, Spain.
Ukraine would just need to make sure to avoid Russian interference in national and local politics; they allowed that during the past two decades out of goodwill and corruption, and we know where that lead them.
As far as neutrality goes, that may probably be the most repugnant part of the deal. But both Ukraine and the Western world need to understand that right now that alignment Ukraine is close to impossible. With the country engulfed by war and Puting licking his chops, NATO wouldn't allow Ukraine to get membership out of security concerns. Not at least until the situation returns to normal.
As for the European Union, right now Ukraine is shattered by war, marred with corruption and at the very brink of bankrupcy. It will take them two, maybe three decades until EU membership can be seriously discussed, and by then Putin should be out of the picture. Either case, by the time Ukraine has rebuilt itself, global politics may have changed enough to allow them to join the EU. The question should be: why would Ukraine want to join the same bunch of cowards who left them hang out to dry?
As far as I'm concerned, we should supply them with modern antiarmour equipment and countermeasures. We don't even have to use NATO materiel if we want to keep plausible deniability. There are a number of NATO-aligned states that could supply modern and capable Russian-made materiel that could be of great use to Ukraine. Give them some Kornets and Fagots, thrown in some long range artillery systems. Let's give them a real chance to resist and damage Russian's economy enough. Negotiation terms may be more agreeable for Ukraine then.
), but a stable federation is not the reason why Russia wants this to happen to Ukraine. They just want to make Crimea scenario more manageable in other regions of Ukraine...
