I thought it didn't stink because of something to do with the size of bacteria and wool's structure making it difficult for the bacteria to grow on the clothing. Synthetics also wick moisture, but they have a reputation for becoming smelly very quickly - the untreated ones stinking to high heaven in just one wearing.

On another topic, one thing that's not mentioned as much is that no matter how clean, merino wool tends to smell vaguely of a sheep, especially when wet. Again, even fresh off the shelf or out of the washing machine.