In order to answer your question about why trying to merge Earth-1 and Earth-38 would require the erasure of everything we have seen thus far that is set on Earth-1, I actually have to lay out the history of E38 as we've had it explained to us on Supergirl relative to the existence of Superman and aliens, and then compare it to the publicly known history of E1 relative to the way in which Arrow, The Flash, and Legends (and to a lesser degree Constantine and Vixen, which would be effected 'by proxy' because of what trying to merge E1 and E38 would do to the history of the other series set on that Earth).
First, here's the history of E38 as we know it to be:
- At some point prior to the destruction of Krypton, its people (or some of them, anyway) discover the existence of Earth and what its yellow sun will do to a Kryptonian's physiology
- In 1981 A.D., the planet Krypton is facing an ecological and environmental implosion disaster, prompting brothers Jor-El and Zor-El and their wives Lara and Alura to enact a plan to send their children (infant Kal-El and 13-year-old Kara) to Earth in order to save them, linking the guidance systems of the pair's 'life pods' together so that they will arrive on Earth simultaneously. However, shortly after their departure, the shock wave created by Krypton's implosion knocks Kara's pod off-course, causing it to be stranded in an area of space known as the Phantom Zone where time doesn't pass, and leaving Kal-El's pod to continue its course to Earth alone, where he is found by Kansas farmers Jonathan and Martha Kent and raised as their son Clark.
- At some point in the next 24 years, Clark discovers his alien origins and the superpowers that he's granted as a result of his DNA interacting with Earth's yellow sun and encounters Midvale residents Jeremiah and Eliza Danvers, scientists who help him to understand these things. He also publicly reveals himself and his abilities to the world at large as Superman, with the truth of his alien origin eventually becoming public knowledge as well, which results in the United States government creating the Department of Extranormal Operations (DEO), a clandestine/covert organization dedicated to monitoring the presence of aliens on Earth.
- In 2005 A.D., Kara's pod is 'released' from the Phantom Zone by the Coluan supercomputer criminal Indigo (Brainiac-8), who also links the Kryptonian prison ship Fort Rozz (which had been stationed in the Phantom Zone) to her pod, and sent on its way to Earth, with Fort Rozz trailing behind. Kara's pod crashes on Earth, where it's found by Clark/Superman.(now 24). At the same time, Fort Rozz crashes in Nevada. After rescuing Kara from her pod, Clark takes her to the Danverses and asks them to raise her as their daughter.
- Fort Rozz's arrival on Earth catches the attention of the DEO, which downloads its database of alien inmates and uses stealth technology to conceal it. The DEO also begins hunting down the Fort Rozz escapees - and other aliens - in earnest, making them antagonistic towards Superman in the process. Jeremiah Danvers is also forced to join the DEO - which has come for Kara - in exchange for the organization leaving her alone. His involvement with the organization will lead to an encounter with the Martian refugee and sole survivor J'onn J'onzz in the Amazon jungle and result in his apparent death when he risks his own life to save J'onn from being killed by DEO director Hank Henshaw, with J'onn taking on Henshaw's identity and making a promise to Jeremiah to watch over his daughters Alex and Kara.
- At some point between Kal-El's arrival on Earth and the year 2014, other aliens besides the Fort Rozz escapees begin migrating to Earth in secret and begin blending into human society.
- In the year 2015, after nearly 12 years on Earth, 24-year-old Kara Danvers - who works as an assistant at CatCo Worldwide Media - chooses to reveal her alien superpowers (which are the same as Superman's) to the world by saving a commercial airline flight - on which her sister Alex (who is secretly an agent for the DEO and has been for 2 years) is a passenger - that has been sabotaged by a Fort Rozz escapee named Vartox.
Now, a history of Earth-1 relative to public knowledge of individuals with superhuman powers and the existence of aliens, both of which are heavily tied in with Superman's existence and presence on Earth-38 (as outlined above):
- At some point before World War II, the United States government becomes privately aware of the existence of "Metahumans" - individuals with superhuman abilities - and organizes some of said individuals into a team known as the Justice Society of America, although the general public remains unaware of this fact, or of the factual existence of Metahumans as anything more than rumor and fantasy.
- During World War II, the Japanese create a "supersoldier serum" (possibly motivated by private knowledge of the existence of the Justice Society) known as Mirakuru.
- In 2012 A.D., Slade Wilson, a former Australian Secret Intelligence Service member and former mentor and friend to Oliver Queen during his time stranded on the island Lian Yu (where a submarine containing the Mirakuru had run aground during World War II) attacks Starling City with an army of Mirakuru-enhanced soldiers, marking the first public appearance of individuals with superhuman abilities.
One year later, in 2013 A.D.. scientist Harrison Wells, the owner of S.T.A.R. Labs (actually a Metahuman from the future named Eobard Thawne who took on Wells' physical appearance after a chance encounter with him and his fiance, Tess Morgan), creates a particle accelerator and publicly tests it, only for things to go horribly awry (intentionally, as it is later learned), resulting in numerous individuals being granted superhuman abilities, among them being Central City CSI Barry Allen (who witnessed Thawne murder his mother in 2000 A.D. and spent the next 13 years trying to find evidence of the existence of superhuman/supernatural phenomena), who begins a public superhero career as The Flash (a name given to him by his 'foster sister' and crush Iris West). It is only after the particle accelerator incident that the term "Metahuman" comes into general public use and general knowledge of the existence of such individuals becomes publicly acknowledged, in spite of Slade Wilson and his superhuman army having attacked Starling City one year earlier.
- In 2016 A.D., Time Master Rip Hunter recruits several individuals - scientist Ray Palmer, Metahuman Martin Stein and his new 'partner' Jefferson Jackson, resurrected assassin turned vigilante Sara Lance, barista (and reincarnated Egyptian princess) Kendra Saunders and her 'fated' lover, Carter Hall (himself a reincarnated Egyptian palace guard), and criminals Leonard Snart and Mick Rory - to help him travel throughout history and stop future tyrant Vandal Savage before he conquers the Earth in the year 2166 and kills Rip's wife, Miranda, and their son, Jonas, prompting Rip, who is a member of a group known as the Time Masters, to go rogue since the rest of the Time Masters refuse to do anything about Savage's tyranny given that they possess knowledge about the future - specifically an invasion of Earth from an alien race known as the Thanagarians, which is repelled by a Savage-controlled Earth population. Rip and his team eventually kill Savage and put an end to the corrupt existence of the Time Masters while also managing to prevent the Thanargian invasion from ever happening.
Later that same year, a race of aliens known as the Dominators - who have secretly been monitoring and studying the existence of Metahumans for hundreds of years and first appeared on Earth in the year 1951 (a fact that was covered up by the United States government) - launch a full-scale invasion of Earth, leading to the general public discovering the existence of extraterrestrial life "the hard way" after the President of the United States is publicly disintegrated by the Dominators.
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Do you not see why it would not be as simple to 'rewrite' the history of Earth-1 in order to include Superman's existence, which is what would have to happen if you were to merge Earth-1 and Earth-38 together, now?
You can't 'retcon' things to say that Superman's been in existence - and publicly known - for nearly 2 decades by the time The Flash starts without fundamentally altering the way that series plays itself out through its first two seasons, nor can you do so without fundamentally altering the way that Season 2 of Arrow plays out since Oliver and his allies would've reacted far differently to having to face off against Slade and his Mirakuru-enhanced army if the existence of someone with superhuman powers - namely Superman - had been publicly acknowledged.
Superman's existence would also fundamentally alter the way that the Invasion crossover event occurs, specifically with regards to Team Arrow's involvement in it, if Superman's existence and alien origins were publicly known.
There's also the fact that the only reason the Time Masters behave as they do during the first season of Legends of Tomorrow is because of extraterrestrial threat posed by the Thanagarians, meaning that the existence of - and public knowledge about - Superman and alien life would have made the actions they took in refusing to stop Savage on account of his conquering of Earth being the only thing capable of stopping a Thanagarian invasion force completely unnecessary, which in turn would affect the way that Season 2 of Legends has played itself out since the fact that the Time Masters refused to deal with Savage because of the role he would eventually play in saving Earth from invasion is what ultimately leads to their own destruction and results in the Legends effectively replacing them as 'time cops'.
up their own continuity trying to 'fix' it the first time.
