No, they don't want those sales. From Apple's perspective, a $39 streamer would be a loss leader for its far more lucrative streaming service. If other companies are willing to offer that streaming service, it's better to leave the low-revenue streaming products to others, especially since Apple would have to compromise its design and build principles to compete in that space.
As to merging the ATV with the HomePod, I'm sure that has been discussed, but it has serious downsides. The main one is probably that many (most?) ATV users tuck their ATV's into cabinets or place them behind TV's, etc. Many other ATV users rely on other audio devices (soundbars, external amps, etc.) and aren't necessarily interested in an Apple solution. In short, while there are some benefits to doing that (and I wouldn't entirely rule it out at some point), it's not an obvious win for Apple.