I suspect he was considered for trade in the off-season. Many close observers expected him to be traded in training camp. But Steen's LTIRment and Tarasenko on LTIR, and the advent of the taxi squad, made it unnecessary from a Cap standpoint. Meanwhile, Mikkola looks ready and Dunn has struggled a bit in the early season. Tarasenko is due for re-evaluation from his surgery and is apparently skating with gear on his own and taking shots. The motivation to move Dunn from a Cap perspective is a lot stronger now.
I believe the Blues could send a roster player to the Taxi Squad and run with less than a 23 man roster to also stay cap compliant (without trading Dunn). But he seems to be the odd man out with Perunovich in the wings, Mikkola ready now and the redundancy of Krug and Faulk. He has decent value, so the move makes sense.
Its not a case of the trade partner getting distressed goods. Dunn is a good player, who probably still has some additional upside to come. The Blues wanting to gain Cap space with the move presents a problem, since lots of teams are pretty tight on Cap space. They will probably have to accept less value than they'd like to, if that condition is inflexible. Its hard to read the market since Doug Armstrong is notoriously quiet about this type of business, but my sense is that multiple teams have serious interest.