Because walking not only guarantees you first base, but it guarantees that you won't reach 2b, 3b, or home on your own volition, won't advance any runners who aren't forced, and won't advance those who are forced more than one base.
Yes, a walk is a positive outcome. However, for somebody like Dunn with a high SLG%, the benefits of putting the ball in play increase greatly -- not only for himself but for his ability to drive runs in.
In simple terms, SLG% is bases advanced per AB. Putting aside the effect of driving in runs for a moment, a walk is fucntionally equivilent to a 1.000 SLG% - same as a single. However, what is Dunn's SLG% on balls put in play? It's .763 - just 3/4 of a single. So maybe a walk is better than putting the ball in play... (I'm going to go out on a limb and suggest that double plays and errors balance each other out or are more or less insignificant in making my general point)
However, then you have to reintroduce the idea of advancing runners. Getting on base is irrelevent if you don't score. If there are men on base and Dunn puts the ball in play, there's a pretty good shot that they're gonna score. Thus, events which advance runners have extra value. I don't have the stats handy to do the math, but if there's a guy on 1B with 2 outs, he's not going to get driven in by walks, period. If he's going to score, he's going to score on a ball put in play. Because of his power, Dunn is more likely to drive in that run if he puts the ball in play than anybody else on the team.
Now, I still want Dunn taking walks over making outs -- particularly when the bases are empty and the value of runner advancement is removed. However,
if he can maintain the same OBP (and this is key -- he has maintained a high OBP), a higher batting average is a GREAT development for his ability to turn base runners in to runs. This doesn't necessarily mean he should be drastically altering his approach at the plate. We saw what happened when he tried to force himself in to more contact. I'm merely pointing out that if he's able to make contact rather than walk, he should -- especially with men on base.
(PM me if you want my address so you can send me my "Master of the Obvious" award...)