When I say that the Padres upgraded their bullpen with Joaquin Benoit, I don't mean that they did so with just that signing. I mean that even if you take into account that they traded away Luke Gregerson, the bullpen is in better shape for 2014 than it was in 2013. Benoit is also signed for 2015 as well, whereas Gregerson was not. So the bullpen is in better shape for 2015.
You can get into the nitty gritty of each and every statistic where Gregerson and Benoit differ, and there certainly are pros and cons to each pitcher, but in overall value Benoit has the edge. Gregerson has been throwing from a major league 'pen since 2009 and has had 1 such season: that 2009 one. Last year his performance was worth 1.0 fWAR. Since converting full time to relief work in 2006, Benoit has had 5 seasons of 1.3 fWAR or more. Last year his performance was worth 1.6. He has had a couple blips where his performance has dipped. One was in 2008, which preceded needing Tommy John surgery that caused him to miss all of the 2009 season. The other was in 2012 where he gave up way more home runs than usual, but that got corrected (either by regression to the mean or by tweaks that he made) in 2013. Gregerson's near replacement level 2011 and 2012 seasons can only be explain by possibly a loss of feel for his wipe-out slider. Something that he corrected in 2013, but he still wasn't as good as Benoit has been in most years.
Obviously, acquiring Benoit could have been done without the trading of Gregerson, so I don't want to claim that his signing justifies the trade to many of its detractors. The bullpen no doubt would be better with both players. However, there is also no doubt that the OF and bench is now equipped to be more productive in 2014 than it was in 2013 and Seth Smith is a big part of that. Some may see the number of OF as an excess, but an excess is hard to imagine when in 2013 there was a dearth of productive players to man the spots.
Getting away from the Gregerson vs. Benoit discussion for a moment, a benefit of this signing is that there is now more certainty in the bullpen for the 2015 season. Currently Huston Street has an option year that can be picked up, but there are clearly scenarios (injury related) where that would not get picked up. If that were to be the case, the Padres have a proven closer in Benoit that can step up in 2015. Even if the Padres had kept Gregerson, they would not have had that since Luke will be a free agent after the 2014 season. This represents an additional upgrade to the bullpen that stretches beyond just projected WAR values for 2014.
One thing that does have to be mentioned is Benoit's age. With this acquisition he becomes the oldest player on the roster at 36 years of age. His shiny new contract will take him through his age 37 season. He certainly has proven to be a productive relief pitcher in years past, but can he hold up at 36 and 37? You can reference this Fangraphs article about pitcher aging curves and see pretty clearly that on average relievers can see some serious decline in their mid to late 30s. However, one of the indicators of decline is decreasing fastball velocity. That's not an issue for Benoit, as his fastball velocity has actually increased with age. With that development, I would expect him to age more gracefully than your average reliever.
Whatever your reservations were or are about the Luke Gregerson for Seth Smith trade, that should not keep you from liking this free agent signing. It upgrades the team and at the same time it shows ownership's current willingness to spend money to improve the product on the field. Never let the best be the enemy of the better. This may not be the best move you can think of, but it certainly makes things better than they were before the signing.