State-operated cultural institutions are no safer as departments than they are as business units of a larger department. A government that truly wished to destroy them would - regardless of their status under a schedule of the Ombudsmen Act or whatever.

To adress your points:
1. Free and independent collection of the state's records cannot be threateded by directives from DIA 'superiors': the Public Records Act mitigates against that. Incidentally, you should be aware that the PRA anticipated (in its separation of chief executive and chief archivist functions) a time when Archives would be subsumed again into a larger department.
2. Donor perception. I suspect this is an untested canard. Perhaps someone from the Turnbull might be willing to comment on this. As for Archives, well, records must be made and kept, and Archives can enforce compliance.
3. Archives and the Nat. Lib. retain Votes independent of Vote Internal Affairs. The Secretary of Internal Affairs can't siphon off funding from one of those Votes to say, the Local Government or Racing portfolios.
4. DIA, which has recently acquired the IT folk from SSC is probably the best placed institution not to make foolish IT decisions. I might also add that the Nat. Lib. doesn't have a terribly flash history in IT decision making.
5. True, the National Librarian and the Chief Archivist are lower-level managers now (are they deputy secretaries?) However, they retain access to their responsible minister. I would be anxious were the ministerial portfolios to be dispensed with.

I am not an 'enforcer', as satisfying a role as that might be. I am someone with a better appreciation of the probity required of a public servant than whichever Nat. Lib. or Archives staff member/s shamefully leaked the cabinet paper proposing the merger with DIA. That act was hardly a demonstration of the 'professional values of public service'. Quite the contrary. Check out the public service code of conduct some time.

Incidentally, why aren't you upset at the Ministry of Fisheries being merged with MAF? Is it because Fisheries was the creation of a National government?

In what way, precisely, has the amalgamation of Archives NZ and the National Library into DIA been a poorly thought out policy, and how has it had an adverse impact on those institutions? Both the Library and Archives retain their statutory roles and functions unchanged, and both still enjoy access to a responsible minister independent of the Internal Affairs portfolio. The only change is that there are two fewer chief executives.

Public service criticism of a government's policy is provided through the free and frank provision of policy advice. It is up to the ministers of the day, as individuals elected to represent the popular will, to decide on whether or not to accept that advice.

Public servants do not enjoy the privilege of criticising their superiors in public as it undermines that most crucial aspect of the public service-politician relationship: trust. As it happens, one of the most egregious and despicable betrayals of that trust has been related to the leaking of a cabinet paper on the merger of Archives and the Library with DIA.