To be quite frank, a substantial amount of a head of state's ego is how content he sees his people to be. The fact is, lots of Russians do like Putin. Perhaps many don't, but he is able to keep up his own delusions about that by either ignoring them or having his loyalists minimize them. Given his hold on media and other outlets, this ends up working. Putin seems like the only choice for Russia and not enough Russians are openly discontent with Putin and the Putinites. I may be being a bit presumptuous here as I have never been to Russia, but it seems to me that a grass-roots movement is badly needed there. One that is geared towards young people so as to wear down and break this neo-Soviet racket for good. The first Russians born post-USSR are about 20 now… by 2015 or so, someone from that generation should run for office.
Somewhat related joke:
What's the difference between Czarist Russia and Soviet Russia?
In Czarist Russia, power went from Father to Son, in Soviet Russia it went from Grandfather to Grandfather (от деда к деду). Putin's Russia is an awkward, half-assed, and crooked movement away from this, but he is still not managing to get anywhere truly worthwhile.