Dave Singleman convinced Willy to follow his path in life. Willy had two choices - follow Ben into the Alaskan wilderness or follow Dave into a world of selling. He chose Dave. He was obsessed with Dave's apparent success. Remember that Willy judges success by popularity.
WILLY: 'Cause what could be more satisfying than to be able to go, at the age of eighty-four, into twenty or thirty different cities, and pick up a phone, and be remembered and loved and helped by so many different people? Do you know? When he died—and by the way he died the death of a salesman, in his in his green velvet slippers in the smoker of New York, New Haven and Hartford, going into Boston—when he died, hundreds of salesmen and buyers were at his funeral.
The fact that so many people went to Dave's funeral just shows that he was a very successful man. Willy has not had that luck. He has reached a stage in his career where he is an unknown. He complains to Howard that there is no longer friendship in the business because people do not know him. Unwittingly, he is admitting his own defeat. If he defines success by being known, as he shows with the Dave story, then he has failed. However, Willy cannot recognize his own failure. Willy believes he only needs a little time, a little more opportunity, and he will attain the success he seeks. When Howard tells him not to go to Boston, he is essentially firing Willy. This is the death of Willy's career as a salesman, which in no way resembles the romanticized death of Dave the salesman. Willy has failed - socially and financially.
Willy goes to Howard's office hoping for a non-traveling sales job (per the request of his wife), but Howard tells him that no job is available. He is almost ignoring Willy, and even refers to this middle-aged man as a "kid," illustrating that he does not respect him. Willy keeps lowering his salary request and tells Howard of Dave Singleman because he was a salesman that never left his hotel room. He is seen as very good at his job and well-respected because many people attended his funeral. The story does nothing to help Willy's plight because Howard essentially fires Willy at the end of the conversation. That's what he means when he says to drop of the materials. Willy pleads with Howard, but he does not change his mind and Willy leaves feeling like a failure.
AThe answer by allyson (above) is good, but it should be noted more that Dave Singleton was respected. It was more than a matter of money; people came from all over to see him; they came from the entire Northeast for his funeral. This, of course, foreshadows (in a negative way) Willy's "death of a salesman."