I am unsure whether to count the idea of a dwarven genetic memory as being
for or
against a written language. Probably neither.
I think it's less memory and more of a telepathic ability, actually.
The existence of telepathy would preclude not only writing, but also speech, and maybe even art. Unless the telepathy were dwarf-only, in which case speech, art, and possibly writing would have been developed
only to share them with other races (who naturally came up with them first). If so, why would dwarves bother inventing their own language?
. . . teaching the little one the dwarven equivalent of tap code, to allow communication . . .
If so, that would be a strong argument not just for
writing, but also for a relatively small alphabet.
Alternatively, remember that all dwarven names are assembled from nouns. Pictograms could represent the names of long dead rulers, so "Urist Uristurister" would be 3 daggers in a row.
Not bad! Now draw my manager, "Mechanism Labordipped the Rhythmic Treasures of Evening."
Although some dwarves
do have all-noun names. My duke was "Hame (part of an animal's harness) Towerstones" before he went & added "the Immortal Stale Noose-Tournament of Straps" to it.
(after all, the instruction "say friend and enter" was supposed to be legible to either elf or dwarf traders and such, not only master craftsdwarves)
Technically, they wouldn't have been legible to
anybody, as they wouldn't even have been visible. Quite apart from the requirements for even seeing ithildin in the first place, the inscription was on the
outside of the doors, and for thousands of years, those doors stood
open. Or maybe they shut them at night.
Once Elrond reveals the ithil runes on the map of Lonely Mountain, Thorin could read them, no? Or am i misremembering? Certainly Balin's expedition created the "Drums in the Deep" journal that the Fellowship find.
Thorin was certainly quite literate--he considers writing a note for Bilbo to read to be
less inconvenient than waking Bilbo up to tell him in person. Then again, Thorin was raised as a prince of a prosperous kingdom, so if
any dwarves could read & write,
he almost certainly could. The fact that he didn't know about the hidden message on the map (either the existence of the runes, or what they said) means that Thorin, at least, did not have telepathic knowledge of an item that he had carried on his person for some time. Elrond goes on to specifically say that "The dwarves invented them [moon-letters]", although this most likely means that the dwarves developed the manner of
hiding the runes from most light, rather than runes in general.
The Book of Mazarbul is described as having been "written by many different hands, in runes, both of Moria and Dale, and here and there in Elvish script." It was, from first to last, a chronicle of the attempt to reclaim Moria, so these "many different hands" must all have been members of what was, in essence, a war party. Even if we argue that Balin, having been a close companion of Thorin's during their years in Erebor and therefore likely to have received a similar education, Balin would be only one dwarf among "many", some of whom (amazingly) chose to write in Elvish. It seems clear that
Tolkien's dwarves, at least, are quite literate.