OpenSolaris: What is the Dump device for?
The dump device is, as the name implies, where your system stores crash dumps.
You can resize (or disable) it as you see fit, but if your system develops "problems" and Oracle asks you for a crash dump to debug them you will need an adequately sized dump device in order to provide them.
More information on creating/resizing the ZFS dump area can be found here.
More information on why you have a dump device and how to manage it can be found in the Advanced Administration section of the System Administration guide