It means that the person writing the letter didn't care enough about the message or the recipient to bother personally proofreading the message. They just dictated it off to a secretary, and then didn't even bother to check that the typist had gotten their words correct. This suggest that the person or message is so unimportant to the originator that they couldn't be troubled to take three minutes and quickly proofread their own message.

However "Dictated but not read" was particularly insulting in personal letter, whereas in certain kinds of business and medical settings, it was common for short casual communications of the sort that we most use e-mail for today. I've only seen the phase still used today in medical settings where the doctors still get their clinical dictation notes transcribed by typists.