I get the feeling Merle will be rejoining the group soon, to the objection of some of the others (Glenn and Maggie). Somehow, Daryl is going to be rescued, whether it by Rick and the gang by returning or by Andrea finally taking her head out of her ass and helping them escape. I don't see Daryl agreeing to leave without his big bro regardless of what an asshole he is.
That is how he gets let back in Daryl insists on it and they give him the benefit of the doubt because of how much they all like Daryl. Not to mention they need all the firepower they can get at this point.
Having Merle around in the Prison Posse would be counter-productive to the storyline. It'd create another Rick/Shane conflict like last season, which didn't do well for it's ratings. As for more firepower, they just got 4 fresh recruits + Michonne.
