Due to fundamental differences between Chinese and English phonology, neither d nor t can be considered adequate representations for the consonant at the beginning of the word Dao/Tao. The Chinese pronunciation is voiceless (like t and not like d), but it is also unaspirated (without the puff of air which is normally a part of English t but which is never a part of English d). Thus, both transliterations are equally close (or far) from the Mandarin pronunciation of Dao/Tao.
Some people think that existing words in English which come from Chinese words should be remodeled after the Pinyin transliteration scheme, claiming that it has several important benefits over older transliteration schemes. Other people think that the older forms should be retained because the older spellings have now become assimilated English words in their own right, and are not Chinese anymore, while new borrowings should be written according to the official transliteration scheme.
See also: Pinyin, Wade-Giles, Romanization, Chinese language