From my understanding Alaska has come out numerous times to say they aren't interested in merging with anyone. I think the most recent time was when AA was looking for other potential merger partners besides US Air.
I don't see a Southwest-Alaska merger happening without it being a hostile takeover, and that's something that Southwest really can't afford to do at this point.
Personally since I am LAS based and do extensive work in the Pacific Northwest, it'd likely benefit me. However, I still wouldn't want to see it happen. I like and prefer flying Alaska to PDX and SEA compared to Southwest.