I'm afraid I must disagree. There is a balance between too little competition and too much. If you have too little, one or two companies control the entire market and have no incentive to lower prices or innovate.
But when you have tons of companies fighting for a slice of the same small pie, corners are cut and quality drops. And how do you recover from this situation? High quality items require investing money to design and manufacture, and then they either need to sell in massive quantities, or they need to be priced very high to remain profitable. If the market is already flooded by millions of cheap devices, it's very difficult to justify an expensive one, no matter how much better built it may be. There are many times when I have found it difficult to find a high quality example of an every day item in the sea of generic chinese knockoffs.
I'm not saying that the hard drive market is at that point right now, but I have no doubt that SSDs will replace a great deal of the mechanical hard drive market in the future. So while I'm not particularly happy with this merge, I recognize that it probably makes good sense to consolidate in the face of a shrinking market. There's less money wasted on re-inventing the wheel and less need to cut corners to remain in the market. In exchange for hard drive prices levelling out somewhat (and they're currently DAMN good, if you ask me,) we might see the quality climb. And that's okay by me.