As you outlined above, the Steelers could've either (a) pay Highsmith, (b) sign an UFA for just as much, not more, (c) draft high and wait 2-3 years until they develop, or (d) find a cheap replacement off the scrapheap and hope they are competent. They chose correctly this time. Highsmith is a rising player and he doesn't need 14.5 sacks every year to justify this deal. He is good in all aspect of his game, young, complements TJ well, and helps stabilize the pass rush through the rest of Watt's prime years.
When this defense is completely healthy, they are very good. The Steelers make the playoffs last year if Watt doesn't miss any games and they rely on the defense to keep games close. Now with Andy Weidl helping to run the front office, we already saw an investment into the offensive line. Well, the other thing the Eagles value is pass rushers. They were incredibly deep last year with 5 players having 7 or more sacks (4 with 11 or more). They lost Hargrave and replaced him with Carter AND drafted Smith. Look at the Steelers. Watt, Highsmith, Heyward. Who did they draft? Keeanu Benton, the IDL with the highest pass rushing upside in that tier 2 of defensive linemen in the draft.