Well this does seem an overpay and even a PR-related move for Pittsburgh (as in why aren't we spending more money on the major league roster in free agency?). Pirates are under $80 million still for the major league payroll and all we hear about are how the A's need to spend to get to like $105 million.
I am not a fan of overpays. I have been pretty consistent in disliking many of the big contracts the Phillies give out (for the amount and not necessarily the player). Ortiz is clearly the classic case but I would have been fine bringing him in for somewhere in the $1.$2 million range knowing what we knew back when he was 15 or 16. Bergolla always seemed like an $800K-$1M player to me. Even Caba should have been $2 million instead of $3 million.
That being said, I hope there are a bunch of $500K players out there and we sign 6-10 of them. That would be my ideal class in this situation since we pretty much are out on anyone else in the top 50 and our top guy now (Izaguerra) is below $1 million reportedly. Let's sign 5 more kids in the 50-100 range and be aggressive on pitching since seemingly good arms can be had for modest sums ($100K-$200K) given the analytical risk that discriminates against all young pitching.