I'm not locked into either trading or keeping Dunn but if the Reds to retain him, there are some things to think about. His BA may not be extremely high but you can be a VERY good player (even a HOFer) without a very high BA.
Harmon Killebrew - .256 (never hit .300 in his career)
Reggie Jackson - .262
Mike Schmidt - .267 (.961 FP)
Ernie Banks - .274
Mark McGwire - .263
Defense? Killebrew didn't make the HOF with his defense. His FP at 3B was .940. .976 in the OF. Adam Dunn's lifetime FP (so far) is better than Mike Schmidt's lifetime FP of .961. Among OFs over the past 3 years, Dunn doesn't have a great FP but it's comparable to Francoeur, Burrell, and V. Guerrero.
It can be frustrating to watch Dunn K a lot but the guy delivers very good offensive numbers. That's what he's paid to do.