Ferguson was a pretty good reliever with the Dodgers, probably another guy on that Mlodzinski/Holderman tier, but it also makes sense to try stretching him out into a starter. He has an unusually deep pitching repertoire for a reliever, he threw 4 different pitches last year (4-seam, sinker, slurve and cutter) and 3 of the 4 were extremely effective (all but 4-seam). Considering the Pirates have been very effective at improving pitchers by increasing sinker/decreasing 4-seam usage, it makes a lot of sense to try it out.
Ferguson's 4-seam fastball got knocked around last year (.588 SLG, .513 xSLG), but his cutter (.148 SLG, .188 xSLG), slurve (.286 SLG, .263 xSLG) and sinker (.316 SLG, .419 xSLG) were all extremely effective pitches. His 4-seam used to be effective as well, but he lost a tick of velocity on it and I think it hurt him a bit. Basically I think Ferguson definitely has the stuff to be a SP, I'm more concerned about endurance and how deep into games he can pitch.
Why they have 8 starters already
Because gambling on Oviedo being their #5 after he's coming off TJS without any MLB proven backup plan is probably not a great idea.
They have Skenes, Keller, Jones and Falter as 4/5 in their rotation, and that last spot will likely be one of Ferguson, Oviedo, Burrows or Ashcraft. I wouldn't be surprised if they would prefer Oviedo to be in Ortiz's role from last year (SP/RP swing man), rather than being a pure starter.