Hibernian raced into a three-goal lead in the first half and while Scott Arfield got one back before the break, Rangers never looked like getting back into the game in the second half.
It has been more than ten years since Rangers won a domestic cup and Sunday was another one of their disappointing days in cup games.
Ferguson insisted that Rangers are big enough to be winning domestic cups and conceded that the performance from his former club was atrocious at the weekend.
He admitted that he could not believe how bad Rangers were on the day and feels the disappointing part was that Hibernian showed more desire and commitment to win the game than the Glasgow giants.
The former Rangers captain said on the Go Radio Football Show: “Rangers as a football club should be getting to finals and winning finals.
“The performance, I couldn’t believe what I was watching. You are in the semi-final at the national stadium.
“Hibs, for me, looked as if they wanted it more and that’s disappointing to say that.
“They had more desire and had more about them.”
Rangers will have their new manager Giovanni van Bronckhorst in the dugout when they host Sparta Prague on Thursday night.