I didn't really expect Luke to show up, mostly because of the scale of the story and the scale Luke usually works at. The Mandalorian is small scale. The main villain is a local Moff in a Light Cruiser (he doesn't even get a full-on Star Destroyer) and the stakes are personal with the hint of someone behind the scenes that will be someone else's problem. Which is fine, it's a good setup for Din to realize that some things are more important than a Creed. Like Grogu.
Luke, however, operates on the galactic scale. He deals with Death Stars, Emperors, and the cosmic conflict between light and darkness. The Skywalker stories are so far above these Outer Rim troubles that inserting Luke into one of those is sort of like inserting an exclamation point into a sentence. It just ends!
But that's why he works in this episode for me. These outskirt troubles have caught the attention of someone so very far above what they usually deal in. That's probably why Moff Gideon gets that look when he realizes what's about to happen. He messed up and got Jedi attention. And not just any Jedi, the one who more or less killed the Empire itself. Anything Gideon was up to on that ship ended when that familiar X-Wing emerged from Hyperspace.
The story, for ten minutes, had jumped to galactic scale, and nobody on that cruiser was ready to deal with that. And yet it all pulls back to the small scale with Din taking off his helmet to say goodbye to Grogu. Which is exactly where the story should be. Because, the heart of The Mandalorian is the relationship between those two, so that's what the season ends on.
Best thing is, though, I have no idea what the next season will do. Not only is the Darksaber thing very unresolved, but with Luke in play, the stories can now be anywhere from the personal scale to fate of the galaxy scale. I hope it stays small and uses the big scale sparingly. But we'll see. You can't really get away from having one of the main characters of the show attached to Luke Skywalker and still stay small scale all the time. Because that's Luke Kriffing Skywalker and the galaxy does revolve around him to some degree.