Problem with both a Sturmgeschutz and/or an S-tank style hull gun on the Merkava is the location of the engine. It precludes a low, hull mounted gun and then you lose most of the point of having one, which is a substantially lower silhouette over a normal, turreted MBT. The best you could hope for would be rather like a Ferdinand/Elephant style Panzerjaeger - a fixed casement at the rear of the hull where the gun compartment would be. In order to take advantage of reverse hulldown positions it would also have to be as high or even higher than a conventional turret (or have an open or "cleft" compartment). So, its just as easy to go with a conventional turret.
Another matter is of course that such tank-destroyers/assault guns are essentially the result of a defensive mind-set. Something the Israeli Armoured Corps could never be accused of, particularly since the 1967 war!
However, there is another option which the Israelis haven't really explored yet with the Merkava. A modular system with easily transferred hull modules. One as an MBT, one as a HAPC, another as an SPG, etc. Built all on the same assembly line, you get economies of scale and so cheaper production costs. For the army, it gets versatility. You need more HAPCs? Simply swap out some of your MBTs for HAPC modules. More MBTs? Swap out some of your HAPC modules and so on and so on.