Tbh taking it as an isolated decision, I think it's probably the correct decision from the club's point of view albeit overall I'm not defending the club or Rooney at all.
General footballing opinion at times differs greatly from general CW opinion and I think this is one of those times - the general footballing world, including players, will view this as a 'sign of intent' or whatever it is. In pure playing terms I'd agree with presumably everyone here that Rooney is worth nowhere near £300k a week. However, looking at it from a slightly more long term point of view, how the football world view us in light of our almost certain failure to qualify for the CL is important and I do think us having Rooney locked down will be a help in the eyes of any potential players we might be looking to sign in the next couple of years. We will need every potential draw we can get given CL football will not be one of those draws.
We need to get back in the CL as soon as possible because whilst we're only out of it for a year or two our reputation across Europe won't take the hit it would do, IMO, if we're out of it for say, five or more years. Look at Ajax, they're not even out of the CL and they're viewed as little more than a club that used to be great, and once you are viewed as that there is little way back these days short of being bought by owners with silly amounts of money. It is crucial we make a quick return to CL football and having Rooney I think helps rather than hinders that. This is before we come to financial considerations associated with losing CL football having been in it for so many years, and it's fairly safe to assume the financial ramifications will be significant.
Where the club deserves criticism is in allowing things to get to the point where Rooney can hold us to ransom like this precisely because he knows he is so important to the long term future of the club.