I'm mixed on this. One of the strengths of Rails was that it was the dominant Ruby web programming framework. This meant that virtually the entire community was behind Rails when it came to web app development - unlike some other languages, which have several frameworks competing for the crown. But Merb has recently started to give Rails a run for its money. Fortunately, the learning curve between Merb and Rails is relatively small.
So on the one hand, it's great that the Ruby community won't splinter between two competing frameworks.
But on the other hand, Merb was really creative and innovative, and I'd hate to see that innovation slow down as it becomes the Establishment.