Why doesn't Powerball and Megamillions do a complete merger?

Question

into a single game for X number of draws a week and a single jackpot

Answer 1

Because they make more money having separate games of course.

Answer 2

These games make the most money when the jackpot grows to a value much larger than average. With two games that happens twice as often as it would if there was only one game. Consequently they prefer to keep both games.