In my gaming group we usually end up using all the skills in one form or another, in either as background flavor for the character or practical use during game play. Such as my wizard/fighter has Craft (Painter) and Perform (Dancing). While these two skills have no practical use during dungeon delving they are important aspects of his background and I keep them at a decent level. Also lumping all knowledges in one skill Lore would make Wizards way too powerful. Using my wizard as example he has ranks in Knowledge (Arcana), Knowledge (History), Knowledge (Nobility), Knowledge (Astrology), and Knowledge (Local-Sharn). Each of these Knowledge skills have been used a lot in the course of the campaign.
Instead of removing or merging skills why not take a look at your campaign and gaming style and try to make those skills that aren't used, used more often. I think that would make for a more rewarding gaming experience in the long run. If you are concerned about not having enough skill points you can use this house rule our group picked up from Conan d20 concerning skills. Skill Points gained by Race or by High Intelligence can be used on Cross Class skills for 1 point per rank, instead of 2 points per rank. Skill points gained by class cost 2 points per rank in a cross class skill. Max ranks limitations remain the same.
This allowed my Wizard/Fighter to have a number of useful skills while at the same time not sacrifice a lot of skill points for maintain the background flavor of the character.