Disagree that NATO didn't know, they were briefed in the US on the 30th of June.
http://pressimus.com/Interpreter_Mag/press/3455There have been numerous geo-located pictures of Russian convoys crossing from Russia into Ukraine (including a Russian border guard posting some for a short while on Facebook, before I think he was relocated to Siberia

). This includes several pictures of a medium range Strela-10 in Russian terrorists hands.
There has been a massive open escalation of support for the Russian terrorists with reinforcements of not only numbers, but heavy equipments including T64 Tanks, APC's and SAMS as air superiority is one of the advantages the Ukrainian army has. Since the signing of the agreement EU agreement on the 27th of June and the ending of the ceasefire and the Ukrainian ATO successes, Russia is trying to currently a save a losing situation. In Russia they were initially advertising for ex-military aged up to 40 for fighting in Ukraine, in the last few weeks they have also been looking for tank crews and other mechanised specialists. Although there are GRU undercover troops in Ukraine (no different to special forces in any conflict) they are in the background, with the masked ex-Russian troops the face of the operation along with a few ex-Ukrainian police and Ukrainian gangsters and opportunists.
Most of this information does not appear in the MSM who had largely lost interest in what is happening in Ukraine but does elsewhere. All of the responsible websites like The Interpretor only change something from a possible to a likely when it is independently confirmed and a probably true when confirmed from multiple sources.
Look back over their daily diary for the last few weeks and you will get the picture.
http://www.interpretermag.com/I agree hindsight is a wonderful thing and I'm sure from what has been said so far, like many aviation tragedies, this one has been caused by a series of events, including inexperienced operators using an old Buk system. I'm sure from what I've seen so far that they did not deliberately target a civilian airline and thought they were shooting down a Ukrainian AN-26, but that is the fog of war. Now Putin is trying to blame the Ukrainian government for fighting against the invasion of their sovereign nation by Russia, after the illegal annexation of Crimea, which of course breaks International laws and treaties that Russia has signed.
Airlines have already rerouted, although I think the treat has receded as there are picture of the Buk systems including one with two missiles missing going back across the Russian border.
Personally, what I am find particularly odious is the Russian claims that it was nothing to do with us, where all of the evidence is pointing in their direction, but this is sadly par for the course as it is part of their propaganda DNA.
I don't think anybody is suggesting NATO troops on the ground as the Nuclear powers have always avoided, quite rightly, direct confrontation, but both side have fought wars against each other by proxy through the supply of training and equipment of the side they support and it does make a difference as we saw with the Russian invasion in Afghanistan.
The MH-17 airline tragedy highlights the dangers of when things go wrong and through miscalculation escalate out of control. This is why I'm all for clipping Putin's wings in ways that will not start WWIII, before something like a confrontation in the Baltic's does start a major war.
If sides had been more peacefully assertive and communicative before WWI I think it may have been avoided as the treaties from 1815 largely preserved the peace in Europe until 1914, although with Hitler's aims I think WWII was probably unavoidable, but without WWI would not have happened. The current situation in Eastern Europe has many parallels to both events and IMO peaceful assertion is what is required. I think we all know that sanctions are at most an inconvenience with an overall economic cost rather than a game changer, but right now they are the best immediate option we have got, while Western Europe reduces it dependence on Russian energy. Russian companies have got to refinance over $700bn of western lending to their industries in the next 2 years and making this more difficult / expensive will hit their industries and economy hard and make Putin's job much harder and position as leader more difficult where the people that keep him power do so on the tacit understanding that their standard of living constantly improves.