Merino is a very soft yarn and therefore pills a lot. The stretching was caused by the silk component. Silk has no memory and stretches a great deal, but because the yarn was mainly merino stretching should not have been a problem. As others have pointed out on other posts about Knit Picks yarns, they are now made in China which has notoriously low production standards.
That's not entirely true. Some of the Knit Picks yarns were
made in China. That's nothing new. But the ones that weren't, such as Wool of the Andes (made in Peru) and Felici (made in Italy), haven't had production moved to China. I have some of the Gloss Fingering and the tag says it's made in Peru. I don't have any of the Gloss DK but I'm going to assume it's also made in Peru. Knit Picks was purchased by another company but their yarns remain the same as they were before. For how long, nobody knows, but so far nothing has changed.