"As you have probably gathered from the above, there aren’t any clear points that the Merb and Rails team disagree on anymore."
Basically, Rails is being reworked to be more modular, to have less tight coupling among components, to have a defined API and test suite, to support other ORMs, etc. These are the reasons Merb came to be, and the merge back into Rails vindicates the Merb team's design decisions.
"To be perfectly clear: we are not abandoning the Merb project. There are many production applications running on Merb that are relying on both timely bug fixes and a clear path to the future. If you’re using Merb today, continue using Merb. If you’re considering using Merb for a project because it works better for your needs, use Merb. You will not be left in the cold and we’re going to do everything to make sure that your applications don’t get stuck in the past."
What this really means is that Merb will do what they should as an open-source project: Integrating with another. But for Merb's changes to Rails to be effective, they will have to continually improve Merb in isolation. Merb's going nowhere.
There's a difference between someone forking Rails on GitHub so they can say "look at me, I maintain my own fork of Rails" (like 99% of those Rails "forks") and a legitimate open source project.
For someone who loves Merb and had decided to leave Rails behind (as much as possible), I have very mixed feelings about this. If this means Rails will start to feel more like Merb, fantastic! Otherwise?
I have a feeling it'll be a long while before I really know how to feel about this...
It'll be interesting to see how well this merger actually works in practice. It seems like when large companies merge the results are often underwhelming. Can a merger of large open source projects work? Will the different cultures clash?