* "para-" or not is irrelevant. Neither was legal.
* The supposed "cadre" thing never really worked. Wherever there are supposed examples of success (such as in Indochina) the success rested on indigenous unrest which was merely channelled. It was obvious that some Russians living in the Ukraine would fall for USSR nostalgia. This didn't require extra input.
The "cadre" thing didn't work because otherwise no foreign troops would have been necessary. I remember how desperately some Russians were looking for people in the Eastern Ukraine finally stepping up against "fascism" etc. during the Majdan thing. Very little happened, and was probably FSB-driven. The insurrection thing isn't really indigenous either. Whatever support the FSB built up, Putin was clearly not as satisfied by it as were Westerners about the Majdan thing.

* Europe did not "disarm".
* European companies didn't really go into a spending spree in Russia. Direct and other investments were quite modest. More importantly, it wasn't done "then", after the peace dividend began. Foreign direct investments (from rest of world) in Russia only took off when the increased energy prices improved the Russian trade balance as well as after deregulation by 2006. It dropped sharply after 2008.
see chart page 15
They can hardly have made much money in these a few years.
* It's not about whether Putin "respects Europeans". It's about whether he sees freedom of action or not. The personalising view on foreign policy ('I looked into his soul' stuff) is mostly bollocks on a continent that's rigged so fast as is Europe.
* The United States trade almost entirely across two oceans; their ports are universal interfaces to world trade.
Europe has more meaningful land connections to no less than three continents.
It also has worked its way out of seemingly perpetual intra-European conflict by seeking more cooperation, and that era of conflict is still in (some's) living memory.
It's typical American to think that cutting off some miscreants is a fine punishment. But to Europeans this means to cut off something meaningful. Confrontation instead of cooperation also risks a return of a pattern of hot conflicts.

Few Europeans seem to be interested in getting caught in a real, European-style, war over the stupid borders of a multi-ethnic state with which their own country isn't allied.
Playing with fire may be fun outdoors, but it's rather frowned upon in one's home.