The ONLY thing stopping ENTIRE SERVER from merging into ONE group is the fact that GNW packs are limited, so merger means less packs per capital.
Frankly, most servers barely have enough truly active player to fill one group. (by truly I mean do all daily missions, bounty etc), only a few that you can count on one hand can do 2 or 3 (or perhaps you have to lower the standard of "truly active" for that)

So no, while I would always love more rewards, this is just not healthy for the game.