Hi Chris,
I've just had one of those 950 MAD tours. And yes, it's mad.
Honestly can't say I recommend it. If you are the type who likes to explore, spend a bit of time in places and do things away from the usual crowd it's a really stressful experience. 3 days is not enough and shouldn't be the timeframe on such a trip. The distance from Marrakech to Merzouga is about 600-700 km not counting every detours your driver will make. By the time you reach Erg Chebbi camelback all you want to do is just sleep, not enjoy the stars or the desert. The hotel we were booked in at the first night (in the dades valley) was a cold, cheap experience. When we asked to have our room's pathetic aircon heater turned on they said it would cost another 100 dirham because as we all know, heating is never included in the price. Although we could certainly afford that, we declined to pay that out of principle. Coldest night in my life.
As expected, the desert was pretty freezing nighttime this time of year too, and the camp attendants provided only with two very thin blankets per person. Fortunately I had my sleeping bag to stay warm but the other guys in our tent didn't sleep one minute and lay shivering all night.
During the trip the driver will take you to lots of touristy places with touristy shops and touristy restaurants where the prices are steep - if you are able to go a bit about on your own, find another cafe and restaurant down the road where things are cheaper. Also, bring some snacks and keep buying water- in the desert there wont be much.
On the last day you will basically drive ALL day back (with a brief stop for a costly lunch). Your Borat-style driver will most likely play 90s techno music or Arab folk songs until you go loopy, so bring ear plugs or your own MP3-player. You may even convince him to play one of your CDs.
In my opinion, go to the desert, enjoy, spend some time there - but don't do these 3-day trips, they are the equivalent of a bland fast-food experience. Too quick to notice, poorly heated and a mildly annoying aftertaste.