First, to be clear, Modric is an excellent player blessed with a splendid combination of pace, touch, creativity and the ability to control a game offensively. He is a finesse player, and it may seem tempting to to test the waters of the flashier La Liga, but Real Madrid may not be his best destination.
He has drawn interest from the famed La Liga club, and it's quite likely that it would be the preferred destination by his current club, Tottenham Hotspur. You really never want to give a great player to a team you're going to have to play against.
He is a player who has spent time in the EPL, who understands the style of play and is familiar with the teams he's competing against. In a more rugged and physical league, his skills are at more of a premium.
At Real Madrid, he'll be trying to fit into a larger group of midfielders with a similar set of skills to his own. It's natural to want to test yourself in what you consider the highest of competition, but sometimes, the right thing is to find the right fit.
In La Liga, he will be just another good attacking midfielder who may not even see much of the pitch. At either United or Chelsea, or even if he stays put, he can be the focal point of his team's attack.
Pushing yourself to your limits and getting the most out of yourself are two different things. Sometimes, you reach your full potential by making the right decision, not just taking on the biggest challenge.
Unfortunately for Modric, his club may not give him the opportunity to play for another EPL club. But he should just stay in the same country if he is going to be sent somewhere else.
He's a great fit and a standout player in the EPL, and he may not be so fortunate somewhere else.