There is a big difference between on-weapon %ED and off-weapon %ED. Imagine you have a conquest sword. The base damage is 37-53, assuming it is non-ethereal. If it is ethereal, the base damage is increased by 50%, becoming 55-79 (I'm not sure, but I think the game rounds down here; unrounded it is 55.5-79.5).
Now let's say your ethereal conquest sword has four sockets, and you stick Oath in there (210-340% ED). Let's say you get 300%, for a nice round number. The total weapon damage is now 220-319. If the sword had a superior bonus to ED, this would just add to the runeword ED, so you can get Oath with up to 355% ED on a perfect roll.
Now comes off-weapon %ED. All of this is summed up, and then affects the total weapon damage. Examples include stat bonuses (generally 1 point of strength = 1% off-weapon ED for melee weapons, but it depends on the weapon type), non-weapon %ED like from Fortitude armor or some paladin shields, damage boosts from skills, and any damage boost vs. undead or demons (such as on Laying of Hands gloves).
Now let's do a comparison. Imagine you take 55-79 damage sword. You need at least 132 strength to wield it, so you already have 132% off-weapon ED. Now you use level 9 Charge (+300% damage). Total damage is 292-420. If you move that 300% damage from Charge to the sword itself, by making Oath as we described, and then use a normal attack, your damage is 220-319 + 132%, total of 510-740.
As you can see, having a higher weapon damage dramatically improves your damage. Generally speaking, on-weapon %ED counts for a lot more than off-weapon %ED. About the only time off-weapon %ED counts for more is when you have lots of straight +damage (such as Grief), or +min/max damage. Both of these get multiplied by off-weapon %ED, but are unaffected by weapon %ED.
In a nutshell: off-weapon sources of %ED are all additive with each other, but are multiplicative with on-weapon %ED. Since strength and/or dexterity will function as off-weapon %ED already, you want as much on-weapon %ED as possible. That Concentration aura from Pride, along with the merc's native Might aura, do a lot more to help you and your party than they do the merc himself.