Why wouldn't he admire Dally?? Dallas is everything that Johnny isn't. Dallas has a "cowboy" mentality. He is rugged, fearless, and bold. This is evident in the statement he makes to Cherry Valance when she threatens to all the police on him. He says:
"Oh my, my,"--Dally looked bored--"you've got me scared to death. You ought to see my record sometime baby."
Dally has lived a hard life and as a result of his experiences in New York and with other groups, he has grown a thick skin. It takes very little to hurt or upset him. This is what Johnny looks u p to. In his mind he may be thinking what it would be like to be more like Johnny. Had he had Johnny's boldness, maybe he would be able to stand up to his mother. If he had been braver, perhaps he could take his father's beatings. Had he possessed Dally's fearlessness, maybe he wouldn't have been so terrified of the Socs that he started carrying the blade that would change his life forever.