Indeed, this is often explained as the reason for the Merkava series layout. But there must be some significant downsides to this arrangement considering that nobody else has adopted it? (Except for IFV's where something like that is common)
Merkeva was born out of the experience of the 1973 Yom Kippur War against Egypt & Syria. Out of 2,500 Israeli Army dead, nearly 1,500 came from the Armoured Corps. That included many experienced reservists and severely weakened the Corps with the threat still remaining. So existing armour was extensively modified to make it more survivable.
But for the new tank "...the vehicle would have to be capable of withstanding an enormous amount of punishment without endangering the crew's lives. Since crew protection was the over-riding concern, every aspect of the tank had to adapt to this demand; firepower would have to come second and mobility, third. In addition, the tank would have to be large enough, and sufficiently comfortable, to accomodate a four man crew through long hours of operational duty, and eventually combat............. The primary concept was to make every part of the tank play its part in the crew's protection"
Merkeva was designed after studying Leopard, AMX-30, Chieftain & XM-1 as well as the T-72.
The main sacrifice seems to have been speed. Probably less important when fighting around the rocky Golan Heights than the plains of Europe. Arab-Israeli tank battles were fought at much closer ranges than were envisaged by NATO so less needd to move quickly around the battlefield. Firepower saw the 105mm gun selected (120mm in later versions) but with more ammunition than in many tanks (again borne out of experience when tanks ran out of ammunition in 1973 and had to withdraw from the fight)
New Vanguard 21 Merkeva Main Battle Tank 1977-1996
As with so many other pieces of equipment you can't have everything in the Protection/Mobility/Armament equation. What you choose of this mix is driven by the kind of war that you expect to fight. The Golan Heights isn't the northern plains of Germany.