This colorful simile reveals the high regard in which Wordsworth holds Milton. By saying that Milton's soul was "like a star, and dwelt apart", he is expressing his firm belief that Milton, both as a man and as a poet, was one of a kind, different from the common kind of humanity.
According to Wordsworth, it wouldn't just be nice to have Milton back; England actually needs him. The implication here is that there was something special about Milton's character that is noticeably lacking in the England of 1802. Like many of Milton's admirers, Wordsworth seems to regard the great poet as possessed of a keen sense of virtue, which he expressed in his voluminous body of work.
But there's precious little of that in London, 1802. As the speaker, whom one must presume to be Wordsworth, looks around him, he sees a selfish people engrossed in their own little worlds, without freedom, manners, power, and, of course, virtue. If Milton were alive at his hour, things would be altogether different. He's convinced that Milton would put his extraordinary literary talent, not to mention his inexhaustible capacity for virtue, to the service of his country, just as he did during his lifetime.