Dinamo at this point is sadly nothing more than an empty name. Even the legacy they had was pretty much ruined by playing in the KHL which deepened the association between the brand and Soviet/Russian hockey and it's subsequent legacy. So that's one part of it.
The other, one that has been known for years, that Latvia probably cannot support such team playing in Liiga and Finnish teams have nothing to gain and a lot to lose by allowing Latvians to play in the championship.
What Latvia should be financially capable to do is build up their own league to the professional level, even if the lowest one at that, on par with Romania or Kazakhstan. The talent pool is there, the money is as well. Sport obviously has a huge following so it's actually amazing how little ambition of making the local league matter to people the Latvians had throughout the years. If we managed to build out basketball league, under similar circumstances, to 12 professional teams playing in (mostly) new arenas, surely Latvians can scrape something up with their hockey if they put a conscious long-term effort into it.