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What happened to Russia mil aviation?

Why does it seem so hard for Russia who is an advanced country to advance its military industry on par with the west? Even to to point in which only an engine gap prevents the Chinese from surpassing them? Here are some points.

1. Russians seem content on building up to 4 flanker varients even when the market is saturated with flankers.
2. There 5th generation project has development problems.
3. No low cost affordable mig-29 replacement, giving this market to the Chinese.
4. Mig is on its last leg.
5. 5th generation engine delays.
Why is it so hard for mig to package a light internal load Mig-29 sized and sell it?
They could even use conformal bays ala silent eagle.
Now they are losing in the high end and low end markets.
They could get buy with F-117 level stealth in a mig sized body with a very modest 1klb load

And sell it for under 60 mill

Whats happing to Russian aviation, and innovation?

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