I don't think he was even overpaid at the time of his signing. Sure the term was a little longer than I'd want, but it's likely what Holland had to do to bring him here. He was not in a strong negotiating position.
This is a statement that is made anytime we talk about how we need to get younger.
Is he overpaid now? Yes.
Was he overpaid at the time of his signing? Maybe slightly.
Would he get six million if we re-signed him next year? Not a chance.
Are we going to re-sign him? Probably not.
Is he going to get traded? No.
At the end of the 07 season Schneider jumped ship for $5.6 million with Anaheim, leaving a major hole in the Wings defense. Holland was scrambling for a #2 D-man and found Rafalski who similar to Schneider was a puck-moving defenseman good for 40-50 points (which is what Schneider was until he was paired with Nick and had two career seasons), who fit into the defense puck-moving system in Detroit, was younger than Schneider, a two-time Cup winner, and a local boy to boot.
Everyone wants to kill Rafalski when he makes a bad turnover, but for every one of those there's the tremendous outlet passes and quarterbacking the power play. More than even Lidstrom, Rafalski stretches the Wings offense and keeps the other teams defense honest. Because skating in front of his own net he's capable of rocketing a pass to a forward headed towards the offensive blueline.
Yes the contract looks less good now that we're in the last two years and his play has tapered a bit. But it's unfair to just look at him now and call him overpaid. At the time it was a good signing, and considering how 2008 worked out (and even 2009), it was worth it.