Surely the Merlin situation is all the result of history. As I understand it the Merlin was designed in the days of the cold war. At that time the RN was committed to providing ASW capability in support of the American strike fleet as part of the NATO WWIII scenario. The CVS were full of ASW Sea Kings with only a nominal SHAR package (sorry WEBF) to 'hack' trailing Bears.
The RN invested almost totally in the future of ASW, by investing in towed array frigates, the Type 23s, with a very capable ASW helo on the back, the Merlin, to fix and destroy the subs located by the towed array. The Merlin was therefore designed almost entirely with ASW in mind, with ASuW as a very secondary role. Unfortunately the project ran very late, and by the time it arrived, ASW was not as prominent a task for the RN as it had been.
As for the number of Merlins being up graded, well how many Merlin platforms are there left, compared to when it was procured. I'm sure any recent copy of Janes will provide the answer. WEBF goes on about selling off Type 23s early, one is only 8 years old I believe, but he is right and you must realise that part of the 'hidden' associated costs of paying off such ships early is effectively the loss (in terms of it not being needed) of a £40+ million pound helo.
Feel free to disagree anyone, but hopefully in a more reasoned way than a Lynx vs Merlin p*ssing contest!