He won't kill Doakes himself, but he will hand him over to the state to kill.

Yes, and it's clear the audience is meant to be aware that murder by proxy/state is still murder.

I can't describe how pleased I am with the way this season has been subtly undermining the framework of the vigilante story, forcing us to acknowledge its hollowness and the ugliness of what Dexter does.

They came completely through with that (the writers). It's really tricky, putting a show on such a premise and not cheating and taking the easy way out and leaving your audience comfortable with their state of mind the way Miami was in the mid-season episodes - "Dark Defender" and all that, the vigilante as superhero and what he does as a necessary evil. But not this show.

(Sidenote: I'm reminded of the difference between what Alan Moore does in Watchmen with Rohrschach and the many imitations/homages/inspired-by-descendents by other authors.)

Towards the end, there seems to be something almost like affection or respect between them, which Dexter of course demolishes by allowing Doakes to see his true self.

Oh yes, I had that impression, too. I mean, of course Doakes' pleading for the life of the drug dealer has other reasons as well, but I thought he really meant it when he said "you don't have to do this, you have a conscience".