What if for some reason, after the invasion of Kuwait, the US and the West decide to do nothing - except oral condemnations - about the annexation of Kuwait by Saddam Hussein?
And by nothing I mean even strong/crippling sanctions against Iraq don't happen, for whatever strange reason.
What would be the state of the Middle East? How powerful would Saddam Hussein and Iraq be?
A lot of very bad things in many parts of the world. Because what has happened is the
successful invasion and conquest of a sovereign state, a UN member etc. This is something the "world community" has declared Wrong, Not Allowed, since WW II.
The conquest of South Vietnam doesn't count, as neither country was a UN member, much of the world did not regard South Vietnam as a legitimate state, and the conquest was cloaked by internal rebellion in South Vietnam.
Tibet was not recognized as sovereign. Soviet control of Afghanistan and eastern Europe was limited to establishment of puppet governments when Soviet troops were already on the ground.
In the run-up to World War II... the USSR muscled into the Baltic states, with a pretense of "mutual defense" and then staged plebiscites. Hitler got away with muscling Czecho-Slovakia - and that was considered a shameful submission by the other Great Powers, leading them to fight a bit later. Mussolini had earlier got away with conquering Abyssinia, which was also considered a shame, and an implicit "green light" for Hitler.
Post-World-War-II, there was an international consensus, expressed in the UN Charter and enforced by the US and its allies that conquest in war was prohibited. That enforcement was never openly challenged before 1991, when Saddam thought he could
explicitly break the rule.
Now he's done so, without real consequences. And as with Mussolini in 1935, the can of worms is opened.