I'm glad they did it for 5 reasons:
1- He wants to be here.
2- He's the best starting pitcher in baseball.
3- We now won't end up with a Randy Johnson/Shawn Kemp situation.
4- Basically he's already earned it in his career thus far. If he drops off some, then he's still brought the team their 25 million a year worth for the last 6+ years in my view, and they could find a trade partner much more easily if needed due to his being locked up at what will be considered reasonable for THE elite starter (remember... he's making less than A-Rod per average season on this contract.
5- Plus he's young, competitive, and like an NFL QB who if he's "the best" makes about this much and only has to play 16 games a year plus playoffs). Felix will give you his best every night for 30+ starts per year.
So to wrap it up... Felix doesn't ruin the Mariners salary setup, as they have so many young arms right now, he is locked up forever, which is good for everybody, and if you're a free agent or trade target that is thinking about Seattle, they start to look a lot better when you're essentially guaranteed Felix will be here for your entire contract.
Would it have made a difference in trying to acquire Upton? Who knows... but I can see others that will want to come here to play with Felix, just as we're going to see NFL players wanting to come play with Russell Wilson, or the way NBA players loved playing with Gary Payton, and how others wanted to be here with Edgar, Griffey, and Buhner knowing they get run support as a pitcher, or massive protection in the lineup as a hitter (if ownership had opened the purse strings and let Lou and Gillick acquire a left-handed power bat, but that's another story, and a reason we have no World Series trophies in Seattle).