I thought Merle had some military experience. In an ambush situation, your intended target should be your first shot, so you don't give away your position before achieving your objective. Unless your position is secure and you can complete your mission despite your location being known. His location was far from secure, seeing as a walker managed to draw him out of hiding.
Of course I know this is TV and the villain has to stick around until the end of his arc. But it just made Merle look like a screw up instead of someone with military training.