I agree with you that it's a shame to live in independent Latvia without knowledge of the Latvian language. But I think that Latvian authorities should swap sticks for carrots. How about abolishing language police and introducing free Latvian courses instead? How about tax deductions - the higher your level of Latvian (B2, C1 etc.), the lower your taxes? People should have an incentive to learn the Latvian language. It is a job for the minister for integration to devise approaches that really work and integrate, not alienate people, after all! And in the same time Russian should be at least made official in several places with significant Russophone population, according to European practices of minorities' treatment (described, for example, in the European Charter for Regional or Minority Languages).
I think that the forthcoming referendum is considered by many Russian Latvians as a way to draw attention to the shortcomings of Latvian society. The authorities apparently gave them no other chance to be heard, because their representatives are excluded from the government (I meant THAT political boycott, on the state level).