The reason that John Kerr took the blame is that he acted completely by himself (which he had the authority to do). He wasn't acting as the Queen's representative - in fact, he took a number of steps to prevent Whitlam from "ante-ing up" and bring the Queen in directly, and violated a policy of non-intervention that the Queen had directed him to follow.
Note that Kerr couldn't dismiss Parliament on his own accord; that power is reserved for the Queen. All Kerr could do was dismiss the Prime Minister and appoint another - one who would request the dismissal. He appointed Fraser, Fraser arranges for the supply legislation (the Budget, essentially) to go through, informs everyone he's PM, then disappears. The House of Representatives declared no-confidence in him (which would have made it impossible for Fraser to request the dissolution of Parliament), but then Kerr refused to be told about the no confidence motion until he had signed off the budget and then accepted Fraser's request (made _after_ the no-confidence motion).
Kerr deliberately involved himself in the politics of the day, not least due to a personal animosity towards Whitlam (who, frankly, wasn't the nicest of politicians around). If Kerr had wanted to avoid the situation, he could have arranged an alternative without having to put Fraser in as a dummy PM. The Queen, furthermore, had already made her position clear to Kerr - to pursue a policy of non-intervention. Failing that, he could have made it clear it wasn't about job security (Kerr pointed out repeatedly that he didn't warn Whitlam, because Whitlam could have asked the Queen to sack him) by tendering his own resignation, to take affect once the special elections were over and a new government sworn in.
The '75 dismissal needed to happen. Whitlam deserved to lose the subsequent election, particularly because of how bad his campaign was. I would argue that the Liberal and National Coalition didn't deserve morally to win - their obstructionist tactics of the previous three years had caused the crisis in the first place - but Whitlam took what should have been an ironclad victory and pissed it away by allowing himself, and the rest of the ALP, to wallow in rage and vengeance.
Interestingly enough, the Coalition still plays by this handbook - for the first half of this year (when they controlled the Senate), they played the same nasty obstructionist tactics. Tactics that were never practised by the ALP when the Coalition was in power (to be fair, the Democrats had the balance of power during that period, so the ALP didn't have a chance).