What? The soviets offered a peace where they actually give up power and restore democracy and lose territory? While they occupy like 80% of Austria? I don't know if the soviet diplomats know, but they are "winning the war". I certainly cant understand why anyone would accept anything like this. Thats like stalin in 44 saying hey hitler what about we make peace, I restore the Duma, you give me Poland and I give you half of Ukraine, how does that sound for you?
Soviets are not at war only with Mitteleuropa, but also with Entente. Since Japan is under American control, allies have a solid base for invasion of Russian Far East. Entente signed peace with China and this gives them free hands for war with Russia. If Soviet Republic is abolished, Russians will be at peace with both Mitteleuropa and Entente. Don't forget on China which controls entire East and South Asia and is now at peace with Entente. Rich with resources, Siberia could be tasty target for new Chinese expansion. Chinese are not very fond on Russia since they betrayed Shanghai Pact.
EDIT:
How a realistic peace would look like. All Eastern and Western Slavic lands except Chezkovia go to USSR, Communist republic Yugoslavia is formed without Slovenia but with Bulgaria and the other lands in the area. Hungary becomes a communist republic. Both nations are puppets of USSR.
Lets face it, if the war continues USSR will eventually steamroll Austria.
You are underestimating importance of Ukraine. Russia lost Ukraine in 1917 and it would be great reward for Russia to get hands on it again. Ukraine is breadbasket of Europe and it will be great blow to Germans if they lose their base of resources. The split of Ukraine doesen't mean Austria will get all territory up to Kiev. We're talking about partition of Soviet puppet Ukraine which was created during the war. This means only Galicia is returned to Austria(three provinces) while other is anexed by Russia.
EDIT(2):
Why didn't the Dutch, Spanish, Germans and Italians get any land from France (On which they certainly got some historic or atleast round up border claims)? Altrough they all participated in its destruction.
If you check previous updates, you can see that Dutch got entire Dietsland and Italians got Nice and Grenoble. Spain got National French overseas territories instead of continental parts(this is why short civil war broke out in Spain). Germans got Wallonia. Most of the France had to be preserved to lure French exiles into Mitteleuropa. France isn't meant to be erased from the map.
About Yugoslavia, Hungary, Slovakia, Finland, Poland, Lithuania, Estonia, Latvia, Romania, Greece, Albania, Bulgaria...those are all countries under Soviet control. Soviets can demand them, but I argued some lines above why Soviets don't have absolute advantage in negotiations. They can take most wanted areas like Ukraine and Belarus, but they can also try to continue war and risk conflict with three or four major alliances(Mitteleuropa, Entente, China, Ottomans). Austria is not going to be steamrolled since reinforcements from all Europe are holding the line. Current position is static frontline, nobody can't attack and nobody doesen't retreat.
By the way, I appreciate your critical views. If you wish, you can hold your opinion and take a role as more hawkish Soviet negotiator(if you insist on your arguments, I'll make another update where Russian team of negotiators is reinforced by radical officer which demands best position for Soviets). My AAR is made at least as semi-interactive project where readers have right to change the story with their opinions and voting.
Everybody, thanks for comments.