Why the blockchain isn't just a Merkle tree
A bitcoin full node independently validates the history of the network. To do so, it must validate each block in sequence (which includes all transactions in each block). 

A merkle tree provides a cryptographic commitment to some data, but does not hold that data itself (it just holds hashes of the data). So a merkle tree alone is insufficient to validate the history of the network. Nodes need block and transaction data to do so, not just the merkle tree commitment.