A master financier who makes everything he touches turn to metaphorical gold, Merdle turns out to be only a hollow shell of the man he is thought to be. His crash is shocking, spectacular, and has dire consequences for nearly all of the novel's characters.
OK, let's get the fourth grade stuff out of the way first. Guess what Merdle's name sounds like? If you guessed the French word "merde" (poop) – ding-ding-ding! Hardy har har! That's right, people; Merdle is quite literally full of crap. Stay classy, Dickens. Granted, there are a lot of other words packed into those sounds: murder, muddle, meddle, curdle. But trust us, the "merde" thing was totally intentional.
Then again, it's not like the reader ever thinks Merdle is all that awesome. From the very beginning, the two things that will eventually collapse in the novel – Merdle's financial doings and the Clennam house – send out strong signals that a fall is coming. In the case of the house, it's all those crazy creaking noises that freak out Affery and Blandois. In the case of Merdle – well, actually what isn't a tip-off? His strange antisocial behavior, which even his wife complains about, immediately shows that he's not part of the in-crowd but has only bought his way in. His bizarre way of "clasping his wrists as if he were taking himself into custody" (1.33.45) hints at the eventual uncovering of his crimes. His fear of his butler – and the butler's knowledge that he is not a real gentleman – echoes Dorrit's fears that his own servants are about to unmask him somehow.
So why make this character so personally insignificant? There are a bunch of these fraudulent financier figures popping up in literature around this time (for example, check out Augustus Melmotte in Trollope's The Way We Live Now), but they usually live high on the hog, making the most of their ill-gotten loot. What would be different if Merdle were flamboyant or charming? Does his being a non-entity cause other characters to treat him differently? Is it easier for the novel to not worry too much about his feelings (and if so, then why does he get such a dramatic ending)?