Any decent manager should forget Madrid. They will sign who they want with no manager input, ridiculous pressure, break you as a manager and then sack you after you lose a game.
It's still seen as the pinnacle for many managers though, particularly as he's from South America and speaks Spanish. Just like for some players, as we've unfortunately experienced, going to play for either Barca or Madrid is seen as the pinnacle of their careers. He already plays a style of football that would suit Madrid, knows the language, and would have an unlimited budget to work with. He'd nearly be guaranteed success as well. It's difficult not to win a trophy with them.
Fair play if he stays though. He is human after all and may want to think about himself and his family in terms of finances because Real would double or probably even triple what he's earning now. But then again football managers have a much, much longer shelf life than footballers so he may go there again one day anyway. If Zidane does get the sack, I think they'll go for him. Whether or not he leaves will be one of those sagas to keep an eye on during the summer.