WideScreen :
IF it had been known to Ukraine, that the airspace above the FL250 (or so, bear me the exact FL) was unsafe, the airspace would have been closed.
That is subject to lot of controversy. Who knew what when and the motivation to keep the upper airspace open to get the revenue (in hard currency) of the overflying charges badly needed by Ukraine was there , bearing in mind it is the same Gvernement authority that both collect those charges and declare if the airspace is safe or not. .
Todays' Wikipedia is rather explicit
emphasis on "today" )
On 26 May, a spokesperson of the Ukrainian Armed Forces stated that a surface-to-air missile system that was being used by the rebels, near Donetsk airport, had been destroyed by a helicopter of the Ukrainian army. On 6 June 2014
The International New York Times reported that surface-to-air missiles had been seized from military bases. On 11 June, the newspaper
Argumenty nedeli [[url=https://de.wikipedia.org/wiki/Argumenty_nedeli]de] reported that a
Buk-M1 missile launcher had been present in an area under the separatists' control. On 29 June the Russian news agencies reported that insurgents had obtained a Buk missile system after having taken control of Ukrainian military unit A-1402;
[40][41] and the
Donetsk People's Republic claimed possession of such a system in a since-deleted
tweet.
[40][42][43]
Such air defence systems cannot reliably identify and avoid civilian aircraft.
[44][45] The Ukrainian authorities declared in the media that this system was not operational.
[3]: 187–188 According to the subsequent statement of the
Security Service of Ukraine, three Buk missile systems were located on militia-controlled territory at the time that Malaysia Airlines Boeing 777 was shot down.
Did the Civil Ukrainian CAA knew ? They say no, But some Western airlines did had some info because they avoided all of the Ukrainian airspace from the beginning of June. ( one and half months before MH17) taking longer routings and additional costs.
But it is all hindsight and without proofs..
For the second part of your post, I fully agree. They are going back in the early Soviet era.