The merger wasn't denied because B6+NK would be too large, the merger was denied because the elimination of Spirit would be detrimental to NK's exisitng customer base, potentially pricing them out of air travel altogether. Spirit sells tickets so cheap that people who traditionally wouldn't be able to affort airline tickets can now afford to fly, and JB's plan was to eliminate those tickets, thus harming those customers.

Of course the counter-argument is that Frontier or another ULCC would fill the void left by the elimination of Spirit; but the current constraints on the supply of aircraft and pilots could hinder the growth of those carriers and leave the void unfilled for some time.

Just my interpretation.