Yea, competition is a good thing - do you think we'd have even the HD channels we are getting now if the two companies merged? A combined D*/E* would only feel the need to keep up with the local cablecos.
The market is going to set rates, just as it does now. What we pay for satellite is dictated by cable rates to a large degree -- if sat cost a ton more than cable, many people who have a choice would pick cable.
I'm more concerned about a merging of philosophies: which side wins? IMO today D* is subscriber-friendly (or channel-friendly): they invest in equipment, get new channels, and sign deals like ST and EI first; then address the rate-structure later. OTOH, E* is shareholder-friendly and rate-friendly: Charlie Cheapo won't get new channels until he's got rock-bottom cost/sub, and sometimes skips channels in favor of cost.
I prefer the channels-first philosophy, there are some things I like to watch that I wouldn't want to sacrifice for a $1 increase. I realize not everybody agrees, so there should be room in the market for them to continue to coexist.