For the Galaxy, the move will probably end up as smart a transfer as big-name designated player signings usually are. The Galaxy have lost Landon Donovan to retirement, so the addition of a new playmaker is right on time. Manager Bruce Arena has a lot of experience protecting creative Brits with little defensive interest or ability, and Gerrard is probably already the best passer in the entire league, so it's pretty easy to see how his game will fit in perfectly for the reigning MLS Cup champs.
For the league as a whole, it's a good, though not great, signing. Gerrard's no David Beckham in terms of star power—hell, he's not really even a Thierry Henry. With Beckham gone, Donovan gone, and Michael Bradley on a pretty shitty team, there isn't a clear superstar attraction the league can point to. Gerrard is a pretty big deal, but not necessarily a "Face of MLS" kind of guy.
We'll see what the move means for Liverpool going forward. Gerrard was a pivotal member of the team as recently as last season, but his abilities—mainly in terms of defense—have fallen off a cliff this year. The likes of Lucas and Emre Can might stand to benefit most; it'll be interesting to see if Can, who's long been a heralded young name in the game, can grow into the starting role.
Gerrard himself gets exactly what he wanted out of this. The life-long Liverpool player has explained that his decision to leave Anfield came down to his desire for an important role in the final years of his career. With his age and declining ability, that simply wasn't going to be the case at Liverpool, not if they seriously want to become a regular Champions League team.
With the Galaxy he will be unquestionably one of the most important players on the team, as well as being one of the biggest names in the whole league. MLS is respectable enough, and his new team is always among the league's best. True, he's traded elite competition and the daily challenges of playing for one of the biggest club in the biggest league, but it's an understandable switch that many players better than he ever was have made. He's put in his years. Now it's time for a little R&R.