This is great if you happen to love every design decision the Rails crew has made for you. If not...
I don't think Merb will replace Rails. I think, ultimately, the two appeal to different crowds. Too some extent, I hope people who are happy with Rails stay with Rails. Merb feels like it's more aligned with the Ruby community than the Rails community. If that makes any sense.
You're never going to love every decision made by the designers of any platform. The thing is, you're likely to make just as many missteps on your own. Every once in a while it's worth it to start with a clean slate but I don't think Rails is even close to that point yet.
I don't think Merb will replace Rails. I think, ultimately, the two appeal to different crowds. Too some extent, I hope people who are happy with Rails stay with Rails. Merb feels like it's more aligned with the Ruby community than the Rails community. If that makes any sense.