It really is amazing.
1.) The location is better suited for the Summer Olympics.
2.) It's one of the few unsuitable places in Russia for the Winter Olympics.
3.) It would have been cheaper for Russia to host it pretty much anywhere else, so no long expensive highways would be needed to reach areas cold enough to actually have the events.
2)No, it's pretty much the only suitable place in Russia. You need a major ski resort with a vertical drop of at least 800 metres for the downhill race. It's all about height, not temperature. Finland, for example, could never host the winter Olympics because they don't have mountains high enough.