merchants would not convert btc>fiat using public exchanges anyway.
Is that correct? AFAIK, only some merchants (like Overstock) opt to receive bitcoins directly. Usually, when you buy "with bitcoin" through services like BitPay, they give dollars to the merchant and sell your coins at some exchange. Didn't BitPay say that they used Bitstamp, specifically, some time ago? Isn't Dell using such a service?
I think it would be foolish to assume that. Dell is a private company. He can take what he likes. If he is bullish on bitcoin - and Michael Dell is sufficiently tech-savvy to be quite bullish on bitcoin - then it is a clever way to gain bitcoin without driving up the price on an exchange.