I attended the panel today when this was announced, and regarding the omission of Ralph Merkle, both recipients explicitly acknowledged him by name. Diffie specifically said that they built upon his prior work.

It also occurred to me that Moxie Marlinspike was in the unusual position of being the only one on the panel of five not to have (yet!) received a Turing Award. (He came off very well nonetheless.)

(In addition to Diffie and Hellman, the other two Turing-awarded panelists were Ron Rivest and Adi Shamir.)