Why does "Copy" replace stuff instead of merging it?
We (the OS X users) have been asking ourselves that question since the age of dawn.

Very well phrased question to a sad response: OS X doesn’t do that and can’t do it without 3rd party tools.

Of the 3rd party alternatives there are a lot, I’ll just go ahead and recommend what I think it’s the best alternative to Finder, but… your mileage may vary. 

Path Finder by CocoaTech is not a free alternative (far from it) but it definitively addresses most of Finder shortcomings and adds a lot of nice things for the same price. 

If you feel more adventurous, you can go ahead and see different alternatives and their prices right here.

Update: Back in September 2010 TotalFinder didn't exist, but it's a very nice add-on that brings Tabs, Cut, Folder Reorder, etc. to the Finder. Not free, but way smaller than Path Finder if that's what you're looking for.

Let’s hope that 10.7 brings a new paradigm where questions like these are not relevant anymore :)