This really was a genius marketing move by Burger King. Whoever thought this up deserves a raise.
As I said before, they had to know McDonald's would decline. The market leader never acknowledges the competition. At best, all it can do is put their competition on equal footing with them. It makes Burger King seem like McDonald's equal. McDonald's had nothing to gain from joining with them. And thus, Burger King, at no risk, can walk away looking like they at least tried for diplomacy -- with the added benefit of being able to say "but it was for PEACE!" -- while McDonald's looks petty in their decline of the offer.
More to that, the actual burger they proposed is hilarious. Whopper on bottom, Big Mac on top? This gives them an actual product to demonstrate just how much bigger their sandwich is than McDonald's. Look at this:
The burger is a trapezoid. The Big Mac bun doesn't even come close to covering the Whopper patty.
Really, really smart move by Burger King to put this "proposal" out in full page ads, right in the public eye. I bet McDonald's is furious.