Sherry has shown sympathy to Daryl’s plight, so there’s a chance that his admiration for Daryl’s strength combined with Sherry’s desire to help could turn Dwight into an ally of sorts for Daryl.
Daryl is hanging on to Glenn’s memory to keep himself strong in The Sanctuary; Dwight didn’t have the death of a friend for motivation.
He doesn’t seem like an especially strong man, but he might not have knelt to Negan if he wasn’t so concerned about Sherry.
Of course, Dwight’s “what might have been” would have involved suffering for Sherry as well.