Daryl looks up to Merle because he's his older brother. I'm not so sure Merle feels the same way about Daryl anymore. I could see him saying something like, "Thanks for getting me out of there, little brother, but you left me on a rooftop to die and then abandoned me with your new friends," then trying to ambush him, forcing a Daryl/Merle battle where Daryl ends up killing Merle to protect the group.