Its totally right that merchants should not permit direct linking, with one exception - where they are not running their own Pay-per-click campaign and are using affiliates to do that for them. Further more, how is the affiliate adding worth to the campaign and the merchant by direct linking? As well as the reasons stated above, I suspect a serious factor is the brand image. By letting affiliates use the official display URL they're effectively ( in the eyes of the consumers ) turning into the brand. The hazards are apparent that in the chase for better CTRs and CR, the associates will create extremely assertive ad copies that might overpromise or not actually represent the brand.