All interesting points - I think the problem is that it is hard to see where obvious mergers fall - Leicestershire merging with Notts would seem to make some sense given that Notts already use them as a vitrual feeder club, likewise there would be a case for Gloucestershire and Somerset merging. Derbyshire are financially the smallest but, well, who takes them, whilst Worcestershire could merge with Warwickshire but, well, I like New Road so that should not be allowed to happen!
Perhaps a better model would be to reduce the game to between nine and twelve full time counties - the test clubs plus Sussex, Somerset and Essex? - and run the others as either one day only or semi pro teams in a second competition alongside the stronger minor counties and, to aid the development of the game there, the likes of Ireland and Holland. The resultant drop in the fixture calender would be useful in upping standards, and would also allow for things like a four way regional competition to be played over consecutive weeks at the start of the year as test trials - The North (Yorks, Lancs, Durham, Derby) Midlands (Notts, Warwicks, Leics, Worcs, Northants) South East (Middx, Slurry, Kent, Essex, Sussex) and South West (Gloucs, Somerset, Glam, Hants) each picking their strongest sides.