neolex,
“but what is the purpose of allowing it, from the Russian standpoint”

I think it’s some combination of the following:

1) The fact that this operation happened at all says that the Russians are not concerned about public relations, or about how they are viewed in the west. They probably think that all they have to do is fall back to South Ossetia, and everything else will be ignored/blow over as far as the west is concerned. I think that, if they were to stop now, they would be correct in that view. But they are getting pretty close to crossing the line.

2) They are sending a message to the Georgians and to the people in the other nations on their borders. “Don’t F with us”. I think that this aspect may actually backfire, and tend to drive those nations closer together, more towards the west, etc.

3) Brutality against enemies has been bred into them culturally; combine that with the opportunity this presented to “get even” and this is the result.