I think that many people don't know how modes work.
The Dorian mode simply starts on the 2nd note of a Major scale. So to notate in Dorian E, you'd use a key signature of D Major, which has F# and C#.
There are two equally valid ways to think about modes, and you've just touched on one of them, the "relative" method, whereby "D Dorian is a variation of C Major starting on D." From that perspective, I can see why you'd want to use a C Major key signature of no sharps, no flats. That's how the Real Book for example is written, and I don't have a problem with that.
The other way to look at modes is the "parallel" method, whereby "D Dorian is a variation of D Minor with a B natural 6th." If we are relative thinking, then the "parent scale" of D Dorian is C Major. If we are parallel thinking, then the parent scale of D Dorian is D Minor.
I personally prefer the parallel way of thinking because it more closely matches what I'm hearing with my ears. When I listen to a song like "So What" aurally it sounds more closely related to D Minor than to C Major. Also in my opinion, if Paul Chambers was thinking "C Major" in his head, then he wouldn't have played so many Bb's and C#'s in his walking lines.

