If he didn't struggle last year and was doing this at Iowa he would have been promoted. He is only 22 and is another control pitcher like Hendricks.
Except he's nothing like Hendricks in that he's an extreme fly ball pitcher who likely would get shelled with the stuff he's throwing in AA in AAA ballparks, especially Iowa.
He's a fly ball pitcher who doesn't strike a ton of guys out, has good but not exceptional control, and doesn't get a ton of outs on the ground. He's 22, repeating AA for a second time, and has a decent ERA. That's the extent of his "should be promoted" but you don't promote or demote guys based on numbers like ERA. If he was striking out a ton of guys, inducing insane ground ball rates, or not walking literally anyone then maybe I'd buy an argument but he's doing none of that. Nothing I've read or seen in limited highlight videos shows a guy who's mastered AA to the point he shouldn't be there.
People like Beckbawg I respect because they spend a ton of time researching a guy and then provide not just (though sometimes it it's heavy on them) stats as to why a guy should move up or is a guy on the rise. You basically just read me the "who has the lowest/highest ERA, they must suck/be awesome" level of scouting which is essentially useless.
Ironically, here's what you said about the Iowa rotation
Frankoff 0-2 2.90
Brooks 7.57 ERA
Perez hasn't broken 5 innings with a 9 ERA
Paniagua BP day guy. 4.29.
Kelly 4.85 ERA
You skipped right over the guy who has pitched better in almost every way than Tseng: Seth Frankoff. He's been far better at inducing ground balls, he's striking guys out, he's throwing 90+ pitches, he's not walking guys, and he's limiting line drives. I don't think there's much there but he has the type of profile (different delivery, control pitcher, trys to get groundballs) where you just never know when you find a guy who can be a fifth starter at the MLB level. I'm not saying he's getting promoted tomorrow but his numbers are all better than Butler's were in the same competition: better K's, better gb rate, more swinging strikes.