But FETCH_HEAD only exists because of the fetch command. Git knows what the upstream branch for this branch is. It should know what the remote-tracking branch for that branch is. So why isn't there a command to merge that branch in?
Git remote-tracking branches are just a cache except when they're not. A better model would be for every command that can interact with remote refs to fetch first by default (like pull does) but take an option to "work offline" and use the remote-tracking version (which would then be a proper cache). Or vice versa, for every command to not fetch unless given a parameter that tells it to. It's ridiculous to have to guess which commands will fetch or not.
Pull = fetch remote branches + merge remotes -> local tracking branches
If you want to do the second part without the first, the git merge command will do it.
From the first line in the man page for git-pull:
"Incorporates changes from a remote repository into the current branch. In its default mode, git pull is shorthand for git fetch followed by git merge FETCH_HEAD."