I find it very hard to believe that the TNG era Star Fleet/Federation, didn't have any idea that the Ferengi were out there...
It's far more likely that there had just not been any direct Official contact with them up till Picard's moment.
Seeing how the race was very RETCONNED after "The Last Outpost" episode (mostly by the DS-9 writers), puts TLO into that category of an amusing tale which needs to be taken with a very large grain of salt.
Obviously, there are a few Ferengi out there that don't live by the Rules of Acquisition..
Just like not ALL Klingons, are Warriors.
Well, obviously. Just like the Federation is neighbored by far more warlike polities, so is the Ferengi Alliance (the Cardies and the Breen, for starters). Unless a large percentage of their GDP goes to foreign bribes, the Ferengi have to have a well-equipped navy to keep somebody from deciding to conquer them for their money. Also unless they make a point of arming all their merchantmen, they'd need warships for commerce protection as well.
And similar to the Federation, they prefer to be thought of as a peace-loving people just out to make a few EC rather than as a military power.