As lounged go, it's quite nice, but it's still that, just a lounge. Some comfortable chairs, drinks and snacks. Nothing amazing, but pleasant nonetheless.

Three hours is not that long and Madrid T4 is a nice airport, and I'm sure you could find somewhere else to sit down, browse the shops and have something to eat - I think I'd rather do that for the sake of 60 EUR.

Also note, that unlike on BA, POUG upgrades on Iberia do not get any extra tier points.