I don't know what the "right" answer is, but we had the same situation with my dd when she was 3rd and some of 4th grade. (She is in 5th now and will be 11 tomorrow).
She had no trouble with copywork and such, but was a terrible (and I mean
terrible 
) speller, so she hated anything that required her to write on her own (i.e. Dithor). Her reading and everything else was on track. Just the bad spelling. And, like your ds, she knew it, so she didn't want to produce anything original.
I continued being her scribe for Dithor for quite a while. Sometimes I would write it on markerboard and she would copy it into the book, but other times I would just write it directly into the book. We didn't start Dithor till about midway through 3rd grade, but at that time, she read some level 2 and some level 3 books (with Dithor workbook 2/3). We stayed in Workbook 2/3 for two years (the second year she had moved up to using some level 3 and some level 4 books). All the while, we continued to work on dictation, and her spelling gradually improved. About mid-late 4th grade year, I suddenly realized that her spelling had improved tremendously. But I was going to finish out the school year the way we had been doing with Dithor. However, before I had said anything at all, she decided she wanted to take over the Dithor writing, saying she could just get it done faster if she just did it herself. This told me that she had definitely built up her confidence. (She was about half way through the level 3 dictation at the time). I really do credit dictation with her spelling improvement. Now, I will say that she will never be a spelling bee champion (or even a contestant!), but I would say that her spelling has come from extremely below grade level to at least average (maybe even the higher end of average).
So, I say just give it some time. She is now almost finished with Dithor 4/5 workbook (has one more genre left). She does it completely as written, and is not hindered by the fact that I wrote for her for a couple of years.
Like I said, I don't know if this is the "right" way to do it, but it worked for us!
Angie