I have to disagree with the fact that merino is overrated. I do agree with Randy that this will be extremely itchy.
So let me identify why merino is more effective:
-Generic wools have many fibers in them (so does merino), and here is where I introduce the word micron. One micron is 1/25000 of an inch. To understand just how small this is, consider that human hairs measure between 30 and 120 microns. Generic wool fibers are generally above 35 microns, which WILL feel quite itchy. Lambswool is around 30 microns, which is itchy... but tolerable. Good Merino is generally 16-19.5 Microns and is (to most) quite a pleasant feel, comparable to cotton.
-Merino is generally more tightly woven because of the smaller fibers, blocking wind efficiently but still leaving enough room to allow moisture to escape. The less dead air space, the more water can absorb. Now I am not sure about your statement that merino absorbs more water weight than generic wool(I'll have to test that out) using the same weight fabric. On the other hand, generic wools are loosely knit so air passes easily which I, personally, wouldn't want in a Balaclava.
There is a reason Merino has the price tag that it does. 1,000's (edit: 300ish) of years of breeding Merino sheep has made quite an impressive garment... just ask Roger Caffin, he'll tell you.