Sanctions are a patronizing form of punishments that have hardly ever been effective and are hard to maintain over a long period of time. Take Iran, even when there is a huge international block working together against Iran, the people suffer yet the government continues but just in secret to develop their nuclear program. And if anything it spurred Iran's warlike actions in the region.
To do it because of Navalny would just be a out of a wish to punish, not out of knowledge it would actually change the situation. And is it the role of the West to dish out punishment?
Besides it would just be used by Putin to empower the internal story of the threat of the West & NATO.