Comment 8 for bug 1549300

This package is in the Ubuntu archive, available for installation on Ubuntu server installs, etc. However, it is only in the Ubuntu main archive as a dependency of the desktop product; it is not a component that we support as part of the server product.

What you have described is certainly a real bug, bug it is a bug we would decline to commit resources to fix for 16.04.

A functionally similar supported component is the 'whiptail' package. It does not have identical commandline syntax to dialog, however, so you may not find it a suitable replacement.