That works both ways though. If he keeps improving...which is probable, then he'll seem like a bargain going forward, particularly as the cap rises. Yeah, he had a tough sophomore campaign, but it wasn't for lack of effort, he just had to figure out how to create a little more time and space for himself. Larkin has the same work ethic as guys like Zetterberg, Yzerman, and Lidstrom. He's not going to be content giving less than 100%, he'll give you everything he's got every night. I'm not generally a fan of long contracts, but it makes a lot of sense with guys that are self motivating.
Kid is clearly being groomed to be the face of the franchise going forward. Giving him a contract with term illustrates management's confidence in him and removes any potential contract distractions for the foreseeable.