Yeah $550k a season for Widdop is pretty decent money. Based on what he potentially could offer the team it's a reasonably cheap gamble for them.
The only real question mark is how he will perform at a club without the best fullback, halfback and hooker in the spine with him. He looked great in that spine, but then again everyone who has played 5/8 for them has. If he can take the potential and apply it at the Dragons, they have definitely gotten great value for him. If not then they're no worse off then if they didn't have him anyway. If he can't be the leader they would ideally want, he would be a very good fullback for them. Maybe not $550k a seasons worth, but definitely not just throwing the money away.