Do you even pay attention to the transfer market? Lucas cost somewhere in the neighbourhood of 40m, Isco cost 30m; Draxler, Reus, Griezman, are all valued at over 30m. Lukaku, no one knows what he is valued at because of the weird situation between him and Chelsea but an absolute minimum is 20m and I'd imagine 25-30 likely. Don't compare these players to Morata, not at all similar.
The only one similar was De Bruyne, who failed miserably at breaking into the Chelsea side, worse so than Morata in Madrid. However, he had a great loan spell at Werder. So he went for about the same price. Madrid really should have loaned out Morata a year ago also, not this year, as he played a somewhat important sub role for them, but the previous year, he easily could have matched De Bruyne's performance at a side like Werder where it is easy to be a young star. These two are each worth 20m.
Morata at 20m is the market, and is appropriate. The buy back is crap, if it's under 40m, but the player is easily worth 20m with his age, and his immense potential. This is what the market says. If Morata had been with a crap side, starting every game, and scoring 20 goals last year, which is likely, he would be worth 30+ mil. The only reason he's available for only 20m is because he's a 20 yr old striker at a team like Madrid, and even though he has immense potential, it's hard to break into the world'd most expensive side. He did however play a decent number of games this season and scored a decent number of goals, especially per minute.
The transfer fee is correct. The buy back is not great, but we'll see what it actually turns out to be and who Real has as strikers in a couple years. If they have two 50m+ rated strikers at that point even if Morata does well, they may not have room for him.
Besides. We buy him for 20m and have two good seasons out of him and they take him back for 32-35m, then we can purchase a 35-40m striker with that fee and a little extra, while also having saved immensely on the wages a more established striker would have cost is over the two years.