It's the right move in the immediate, he's only 23, I think he will have some kind of clause that lets him leave at the end of next season is rumors are to be believed (still really waiting to hear whether this renewal is even true to begin with), but PSG is a better team than Madrid, who are the gods' chosen team this season but realistically they will have some rebuilding to do. With players like Hakimi, Neymar, Messi, Veratti, Wijnaldum (just kidding), Mendes, they have a solid core of players, they just need a coach that knows how to actually manage, and they need the owners to stay the feck out of the team's decisions.
Personally, I'd like him to leave to England over Spain, but regardless of where he goes, the league gets easier for him with him in it. Only a few teams could afford him, City or Real, he'd dominate both leagues with those teams unless Barcelona put up a challenge which still remains to be seen with their financial situation, so this whole staying in a easy league is kind of moot, wherever he goes he'd be massive favorite unless he went to a team like Newcastle or something, which just would never happen. Paris is his hometown, winning a CL there is bigger than anything else club football can offer for him, but after 5 years I'd say you gotta move on and try elsewhere, but that is some good money to make at that age.