I would describe it more carefully. Bottle's advantage that it's self contained and in a single file, however bottle's design also hides away the application object from you which makes it quite hard to have more than one of them. It is possible with the stacked object thing and I think they changed it even to make it possible to do what Flask did, but when Flask started at least there was a design difference there.
By now I really would like to see them merge, but Bottle wants to stick to the design idea of just having one file which Flask will never be able to do because of the dependencies.
Merge is an excellent idea when two projects, frameworks, etc have the same goals (Not necessarily the same features). For example The Pylons Project taking BFG as is base and making Pyramid, with all the experience from Pylons community and BFG. This will make changes on both sides of the community but brings a new Framework with the possibility of improvement. I guess the idea is take the best from both frameworks y make a new one, better, with a big community, and a lot of knowledge from the previous experiences.
By now I really would like to see them merge, but Bottle wants to stick to the design idea of just having one file which Flask will never be able to do because of the dependencies.