Why force a merger when the players can simply move where they want?
Population density and distribution is a huge issue in mmos with distributed server environments. Free Transfers is actually a rather elegant solution to a problem that is entirely dependent on unknown and unpredictable variables. Namely, Player behavior.
You should try and take a step back and think of the overall game population and not just a single server, I think it might help your perspective.
It's kind of obvious what's happening. I think everyone knows the game is hemorrhaging subs / active players. In MMO's a server merge is typically viewed as a failure, that not enough people are playing the game (regardless of how untrue / true that may be).
EME is able to save face by allowing free transfers so people don't complain about being stuck in ghost towns OR having to pay $XX for a transfer to a populated server. Had they charged for transfers my assumption is that more people would have up and quit rather than pay another fee to play the game.
Take a look at the GD forum... the first 3-4 topics have some active chatting between a handful of people, the rest of the threads on the 1st page go 1 or more hours with no reply and maybe 1-2 dozen new topics a day.
Sure forum activity doesn't represent in game activity but there is a relationship they share... hell even FFXIV with it's 15,000 subs has a more active forum. Check any other popular game and the forums move so fast you can't even keep up with the number of topics and replies that are posted every few minutes.
^ +1 to what JP said. If there weren't free transfers, I can guess at the number of angry threads that would have been created already asking for free transfers/mergers due to being locked into 1 server. Right now if someone doesn't like the fact their server is empty.....MOVE.
I thought the Free Transfers were only to the Low (Recommended) populations where it costs 10 dollars to move to medium and high.
Would linking brokers across servers help?