In many ways, Eddie and Dixie became closer to each other than to anyone else in their lives, barring Danny. They could easily have developed into something more except for 2 major roadblocks - his career and her emotional wall of defense.
Dixie knew Eddie for what he was and didn't want to be reduced to just another woman panting after him. She had also been deeply wounded by Michael's death and didn't want to lay herself open again to the possibility of that kind of hurt - especially with a man like Eddie.
Eddie cared for Dixie as much as he cared for any woman. They were working partners, for all intents they were raising a child together, and I think Eddie couldn't figure out why sex shouldn't be another one of the perks of their relationship. But if they had been lovers it would not have stopped Eddie from doing a single thing he did: firing Art, bullying everyone around including Dixie, or sleeping with the chorus girls.
Sometimes no matter how much you care about someone, it's just not healthy to get into a deeper involvement with them. I think both of them could have made each other far more unhappy than they ended up doing if they had pursued it.
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