By rejecting these terms Snowden shows character - but he is now in a really bad situation. Requesting asylum in Poland (where one of the secret CIA prisons was located) was an act of desperation.
It is more a case of Putin being in an untenable position. If he capitulates and hands him over to the US then he will be seen internally as weak. But he needs to maintain and strengthen relations with the US. So allowing him to stay but telling him to shut up is the best compromise they can come up with.
But yeah, if you remember how stupidly long the Polish government held out in their support of ACTA (despite its having few advantages for Poland), you have to realize that the US Government can be very persuasive.
Have you been following what's going on? It's becoming clear that Russia wants nothing to do with him.
And it's understandable: harboring Snowden would damage their relationship with the US considerably, and the US and Russia are too close allies to let this happen, especially since there is very little for Russia to gain from Snowden.
Citation needed!