Cap is going up and that shows in the often over-inflated deals good but-not-great players are getting these days - Vernon, Jackson, Cox, etc.
Luck's deal is an extension i.e. it takes into account future cap growth too but above all, he is a top young QB in a QB-driven league - Colts had no choice but lock him up at a big pricetag.
As for his bad 2015 season, one could well argue that was the culmination of a series of failed attempts by the Colts front office to surround him with decent talent at OL and RB, as well as Defense. What I mean is, you can't take that one sub-par season at face value.
Imagine if Rodgers was at the end of his contract, would you laugh at the Packers for giving him a top-dollar deal (a good 25 mil per, if not more, in the current market) just because he sucked in 2015?