Dragic was asking for 10+ million per, Rockets signed Lin for 8M per season. That decision doesn't look all that great now with Dragic playing wonderfully, for now, but it's not a bad move by any stretch.
Ariza is averaging 15/6/3 with almost 2 steals per game while shooting 43% from the three point line this year. He's still a good defender as well. Ariza wasn't a mistake.
Morey has been beating up on other GMs since he started. Sure, he isn't perfect, but he doesn't make mistakes like other GMs do. He makes far less of them and wins the majority of his moves.
Dragic wanted 10m a year, but he ended up getting 4 years 32m for about 8.2m APY with the 4th year being a player option. Lin was going to be offered 4 years 28.8m. The structure was going to be 4.9,4.9,4.9,14m with the last year being a team option. The problem was, the 4th year didn't hit a salary cap pinch point for the Knicks, so they rearranged it, BUT it was after Dragic agreed to terms with the Suns. The Rockets were concerned that the Knicks would match the offer and didn't want to be out of a PG, so they changed it it to the 5,5,15 deal we have now.
Ariza was overpaid at the time, but he was still developing. He had some good years, but wasn't worth the 7m APY. However, Morey unloaded him for Courtney Lee, which was pretty awesome.
And of course, Morey acquired James Harden for a few picks and Kevin Martin, which was the best trade in the NBA this decade. That lead to signing Dwight Howard and becoming WCF contenders. The only GM who has done better in acquiring superstars recently would be Miami, and I think it's pretty obvious why that is.