This is the kind of deeper dive I totally support, and I agree that just quoting an ERA without the context doesn't give the whole story. I was offering shorthand but 2023 was an outlier.
I'll go a little deeper still and suggest that the OPS he put up in AAA of around .760 doesn't support the 3.98 ERA he accrued there. I feel that OPS-against is a more stable way to gauge a pitcher than his ERA, but ERA is the more familiar number so it's worth converting back and forth for best understanding. Doing equivalencies is a bit of guesswork based on larger samples that may not hold up well for an individual season; a year or two ago I drew up a table of league OPS and league ERA, for a sampling of seasons over the decades, and I use that table when thinking about such stuff.
So, in my experience, a .760 OPS could be expected to lead to an ERA around 4.40, not the 3.97 he wound up with. ERA fluctuates more than the underlying factors that go into it.
As you point out, because of the context of AAA this past season, Varland's OPS-against might be a bit inflated. Overall, the International League had an OPS of .794 in 2023. In 2022 that figure had been .750. Let's use round numbers and suppose everyone's OPS should have .050 deducted to be meaningful. For Louie that's .710 at AAA, and that might correspond to a AAA ERA more like 3.90, coincidentally close to his actual ERA - luck giveth, luck taketh away.
But the majors are harder than AAA. My rule of thumb, again not something "official" but just what I use, is that you can expect a batter's OPS to go down .100 when moving up a level; a pitcher's goes up .100 likewise. That's not supported by published research, I've just found it useful (it's helped me identify prospects like Polanco and Kepler in their first years in the minors as better than their numbers indicate, using age as a factor). If Louie's "adjusted OPS-against" of .710 is bumped up to .810 for the majors, that's darn close to the actual .791 he put up while in the majors. Greater precision isn't possible from rules of thumb, but for me, his 2023 stats in both the majors and minors hold together to paint a consistent picture.
Your comparative stats for other pitchers in the IL are well taken, but I want to point out that no one is sent to AAA to be dominant for a full season. Without checking, I'm inclined to expect that many dominant performers came and went, either being promoted to AAA from AA because of good performance, or being promoted to the majors from AAA, who failed to reach the 15-start threshold precisely because they were performing well and didn't hang around. That leaves us with a greater problem of "small sample size" than usual, and I don't have any solutions to offer except to advise caution.
Basically, no, I think saying Louie "dominated" at AAA is a mild stretch. Unadjusted, the league OPS was .794 and his was .760. Pitchers who don't dominate at AAA may not be great candidates for the rigors of being a rotation mainstay in the majors. That's not to say that Varland can't take that next step. But I'd rather have him do that in a few starts, say 5, at AAA, and if he dominates, then he too can be one of the pitchers who fail to reach the 15-start threshold because he performed well and didn't hang around.
Meanwhile, others have pointed out that my preference to have Louie start at AAA would be more supportable if the FO had succeeded in landing a more solid "#2 type" starter instead of DeSclafani. I don't disagree with that either. I do believe that Desclafani is not a mediocrity, but a quality starter who's been beset by injury causing his numbers to suffer. The gamble the FO is taking is 1) that he's over the injuries enough to be ready, and 2) the past injuries haven't robbed him of the abilities that make him a quality starter. I don't especially like the FO's gamble. But until Disco turns out to be a no-go, I really prefer to ride him and stash Varland at AAA for his final bit of development and seasoning.
Sorry for all the verbiage, but the short version apparently didn't suffice. 😀