If he keeps having years like he did this past season, he isn't over paid. They lock up their #1 defenseman for the remainder of their core's careers, essentially. By the time this contract is near the end, OV and Backstrom will be near/at the end of their careers, Kuznetsov will be likely exiting his prime, I'm sure they're not going to regret having an aging d-man making too much by then.
If you have a defenseman like Carlson, you keep them. We see bad contracts every single year but this isn't one of them. As a Pens fan I see this as a necessary move by the Capitals, it's a no brainer really. Good for them, boring for the average fan who enjoys free agency.