I have a ridiculous number of mods active, and I'd like to download more using Steam Workshop (which has better quest mods as compared to Skyrim Nexus). However, I don't know if merging .esps will cause any conflicts with the Steam Workshop mod manager.
It can be done. Mods from the Workshop are just like mods from any other site except they are directly dropped into your data folder. But because of the way Steam Workshop updates mods, you will need to pay attention to a few things: Skyrim Launcher will check your Workshop subscriptions every time it's launched and merged ESPs would cause the launcher to detect a change in the mod and download the mod again.
You're fine using it as long as you (1) never use the default launcher but SKSE (for example) instead or (2) unsubscribe from the file on Steam Workshop after downloading it, which is the recommended way. You will lose the mod from your nice subscribed files list on Workshop, but you gain the ability to modify and merge the mod without issues. You can still keep the files in favorites or in a collection to keep track of them though.