I am going to simply use rational choice theory to explain why Russia will not invade the Baltic states. I have used this same method in previous forecasts and analyses (the majority of which proved to be correct, by the way) and I believe that it is effective. Although Russia has threatened to revoke its diplomatic recognitions of Estonia, Latvia, and Lithuania, this is more likely just posturing more than anything else.
If anything, Russian threats are being done to stoke tension in the West: few NATO states want to start a war with Russia over a city like Narva, on the border with Russia and Estonia, which is of little strategic importance to NATO (and is also majority-Russian). If a threat of invasion rises, it may raise popular sentiment in the West to kick the Baltic states out of NATO. While an interesting strategy, it is unlikely to work in the short term, as the United States (by far the most important state in NATO) has already sent arms to the Baltic states and other Eastern European countries, a reminder to Russia of its presence in the region.
Suggested scenarios would involve some sort of insurgency among the Russian minorities taking place in Estonia or Latvia, causing angst amongst European states as to the possibility of direct involvement by Russia. This in turn has the possibility of leading to a reduction of NATO-status for the Baltic states and perhaps threaten the organization as a whole. Whether or not this will actually happen in the long-term is uncertain, but it is very unlikely to happen in the short term. Not only would the ethnic Russians in these states be reluctant to participate (their standard of living is much higher than their compatriots in Russia proper), but it would further sanctions and diplomatic isolation from the West. Furthermore, the countries of the region have already prepared for such scenarios.
If Russia were to go through with this strategy, it would have to appear irrational in order to frighten West European states. The reason is simple: a rational Russian state would not start a war with a NATO country. Even if the odds of NATO coming to aid the Baltic states are, say 2%, the consequences of starting a war with history’s most powerful military organization would be catastrophic. Not only would the world suffer from a nuclear war, but Russia would also lose the war. The costs of failure are too great for such a decision to be made.
Furthermore, the Baltic states are not very important to Russia strategically. Aside from the closeness of Estonia to St. Petersburg, the Baltic regions due not pose much of a threat to Russian geostrategic objectives, as controlling the Baltic states would not yield it geographic access to anything besides the Baltic Sea. Russia already has access to the Baltic Sea in Kaliningrad and St. Petersburg. Unlike Ukraine, the Baltic states are not a hub of energy transport for Russian exporters.
Russian provocations are just that: provocations. They are meant to raise fears and annoy the West. Russia has done this before this year, both within the European Union (offering to bail out Greece) and without (accusing the West of stoking tensions in Macedonia in May). This is a classic strategy followed by expansionary powers, a means of hiding the actual weakness within the state’s borders.