Because such an act, at least if done unilaterally, would have been flagrantly illegal and would likely have brought about international intervention and huge retribution on Serbia.

For a start, Republika Srpska never really had any clearly defined territory until the Dayton Agreement, just territory that it controlled. That in itself made a Serbian annexation of it quite difficult.

More importantly, however, for the idea of expanding Serbia to include parts of Bosnia taken over by Srpska to have any legitimacy at all, it needed it come from a negotiated solution to what had to been seen as a civil war endogenous to Bosnia. I can't emphasise this enough. Milosevic, all the way through the Yugoslav Wars, maintained the line that they were civil wars, i.e. that they were conflicts between various Bosnian factions, and as such a negotiated solution was required. If Serbia and Srpska had simply united, then that line collapses - it becomes clearly simply a case of a war of aggression by Serbia against Bosnia; the appropriate 'solution' to this war would now be not a negotiated settlement between the Bosnian government and the Bosnian Serb nationalists, but the complete withdrawal of Serbian forces from Bosnian territory.

To what extent the war was essentially an attack on Bosnia by Serbia (and Croatia, most people forget) or a civil war between ethno-nationalist factions is still a considerable topic of debate in both politics and history, but unilateral union between Srpska and Serbia would have made it clearly the former.

On top of this, there's the role of sanctions against Serbia too. Milosevic was very keen to present himself as a moderate interested in finding a peaceful solution in Bosnia in order to get the sanctions (which were damaging both the Serbian economy and his popularity) eased or removed.

Now, books about the conflicts. As a starter in terms of the basic chronology and summary of events my main recommendation wouldn't actually be a book, but the BBC documentary series The Death of Yugoslavia, which is very well-informed considering it was only made in 1995. Book wise, my best recommendation would probably be Steven Burg and Paul Shoup's The War in Bosnia-Herzegovina - while as the name suggests, it primarily focuses on the war in Bosnia, it does emphasise the important interconnected nature of the war in Croatia as well. Valere Gagnon's The Myth of Ethnic War is also excellent, though I'd say it requires some familiarity with the conflicts beforehand. As for the other prominent ones, Susan Woodward's Balkan Tragedy is worth reading, but with a slight anti-West bias. Sabrina Ramet's Balkan Babel has the opposite problem, too anti-Serb to give much complex analysis. Misha Glenny and Ed Vullaimy's books aren't bad, and they speak from close personal experience, but are journalistic rather than historical accounts. Avoid the garbage that comes from Ed Herman on this at all costs. I hear Louis Sell's biography of Milosevic is pretty good, but I haven't read it yet so I'll withold judgement.

Any other questions, please either reply or drop me a message, I'm happy to talk more about this!