I think you should switch in almost all cases.
I would estimate that I make the switch straight away in about 60% of games, later on (often when everyone adopts Merc.) in another 30%, but miss it out and wait for FM in the remaining 10%.
If you've got a strong trade economy (esp. with the Great Lighthouse), a relatively small empire but with large well-developed cities, and lots of good trade partners, Merc. can cost you a huge amount. (I'm talking about a loss of at least 15-20 raw commerce per turn in each city, in exchange for 3-6 cpt from the specialist and a small increase in GPP down at the GP farm).
I often play with lots of civs, and I suspect those represent most of the games where I've bypassed Merc altogether. With 14+ civs, diplomacy becomes that much more complicated, and it's easy to end up with very few friends. But, if you play the diplomacy game carefully, you can stay friendly enough with four-fifths of the other civs to keep the trading up. The key point is that they're not all trading with each other, and so are getting much less out of trade than you. With lots of civs you almost always get some who race ahead in tech and others who get left behind, so the problem of everyone else switching to Merc. is less of an issue.
There's also the turn(s) of anarchy to consider. If you're going to be switching to FM soon anyway, the benefit of a few turns of Merc. has to be weighed against the loss of production, growth and research during the revolution. If you're racing to Economics for FM and the free GM, then you might have only 4 or 5 turns of Merc. Unless you're spritual, making the switch to Merc. is far too costly in that case.
Merc. is a powerful civic, and early Merc. can be awesome in some cases (like the superpowered GP generator you describe), but, I repeat, there are strategies for which the immediate switch is counterproductive.