JetBlue is a small rival (JetBlue at ~5% of US traffic, Spirit at ~3%) to the big 4 United/American/Southwest/Delta (each with ~17%). At least on the surface, a larger JetBlue might be more competitive rather than forcing them into the unequal partnerships like they have with United at the moment. Certainly, some jobs would be lost, but I do think that Spirit dying is a worse outcome than joining another small airline.

A merger would be more orderly, especially if overall capacity only needed to go down by part of what's in the chunk being cut out.

The straw that broke the camel's back is the fuel spike due to the Iran War. That drained the remaining liquidity.

No idea if the extra time "normal" fuel prices would have allowed Spirit to find a way to stay afloat, but the fuel price spike stole any time they had to figure it out.