Mergers only work if (a) the two teams are geographically close to each other and b) there's not real animosity between the sides. Dragons makes perfect sense geographically and also cause St George have the established history and the 'brand' power, while Illawarra has the talent pool.
Wests Tigers is tricky. Balmain have a big fanbase, but they moved out of the heartland long ago and are spread all across the country. The inner-west is no longer a big League area. People there would rather go to foreign film festivals or Swans games when it's trendy to do so. The Magpies had already moved from their traditional heartland of Lidcombe to Campbelltown when they merged, They had a small supporter base on top of that. So now you have a franchise with three home grounds, no real identity, the longest finals drought of the current NRL teams and playing uninspiring footy.
I don't know how you fix that?