It's not complicated, and IMO, no right or wrong. Manu was ranked #11 in production (PER) among guards last season in the entire league. (
http://bkref.com/tiny/r7kCw)
The average salary amongst the top 10 guards was $11.3m (and that includes at least 4 rookie deals, Irving, Curry, Harden & Wall).
After that, you had Calderon at #12 making $11m in Detroit (now signed a $7.5m/season deal with the Mavs). Conley after that, who will be making about $8m. So, you know, production wise, it's easy to see why the Spurs might've thought somebody might throw $8m-$10m at Manu by looking at the hard numbers alone. Under that view, $7m, give or take, it's an excellent deal, especially since it's only a 2 season deal. You could even argue he made a "significant sacrifice" signing at that kind of money, since his market value could've been potentially bigger.
Fact is, the Spurs didn't want to find out what the market value was. They wanted to make sure he would be back because they value what he does and think replacing that it's going to be very difficult (RC Buford words). Disagreeing with that is fine. At the end of the day one opinion isn't any different than another.