That is a common shirt style for "casual" kilt wearing. Some wear it almost exclusively. Others HATE them.
As is refereced above, the common term is "jacobite shirt," though it is/was a VERY common geneal shirt style for a long, long time. It as the same GENERAL style of pirates. For a LONG time that was the rough equivanlent of a T-Shirt today. There are MANY variations as well. Some sleeves are more baggy and billowy, while others are more tight cut. They are the precursors of the modern "button-down shirt" or more precisely the polo (a fashion expert will probably want FAR MORE specific and less general statements to be more accurate).
I do not own one (but might one day). It just is on the edge of my style. I tend to like clean and graceful lines.
They are on the edge of the line between normal wear and costume. Much further over and one enters costume-dom. That shirt, however, is on the side of acceptable common wear.

As for the Princess Bride, try looking up Bartholemew Roberts. He was THE best pirate of all time and was just after Blackbeard. He captured 400 ships in 3 years before he was killed by grapeshot off Africa. He was also a devoted Christian and a tee-totaler, who banned drunkeness and gambling on his ship, held Sunday services, and entered battle sipping tea and to music (played by his musicians). Yet, he was known also being brutal at times, though not NEARLY as bad as other pirates could be. He was known as Black Bart and the Great Pirate Roberts or the Dread Pirate Roberts. It is to this real character and personality that the name in the movie alludes.

By the way, Roberts was Welsh!