It just had to be done. Part of me always hoped he would justify Mike Sherman's faith in him, but he had never shown it on the field. QB Brett Favre gave him far too many opportunities to show that he was a deep threat who could fight for the ball, like WR Javon Walker did, but it never worked for Ferguson. It was a nice luxury to keep Ferguson and his $1.8 million cap figure on the books this offseason, let him show he's healthy and give him a chance to compete for a job. He was given a lot of opportunities this preseason and in the scrimmage to play with the first team offense. He does appear healthy, but he didn't do anything to stand out on the field.
This does give a strong indication who is likely to stick at wide receiver. Obviously WRs Donald Driver, Greg Jennings, and James Jones. Mike McCarthy specifically mentioned WRs Carlyle Holiday and Ruvell Martin, so they are probably staying too. The rest of the wide receivers in camp are probably on the outside looking in, with WR Shaun Bodiford first in line from that group. The Packers tried a lot of different people as punt and kick returners in the first preseason game, so they probably aren't looking to keep someone who can only return kicks which might be bad news for rookie 5th round WR David Clowney, who looks a little undersized to play receiver in the NFL but has the speed to become a return man.