You may want to turn to a culinary reference rather than a dictionary for this question. Not that *milk toast* is anything to write home about. But at least one food write, M. F. K. Fisher thought is was so interesting in its blandness, that she called it "a small modern miracle in gastronomy". She noted that it is found in her "homeliest" kitchen manuals under "feeding the sick" or "invalid recipes". ([Ref][1])

So, when Webster created *Caspar Milquetoast*, it was an implicit and fanciful way to describe a character who is as ordinary, bland, and inoffensive as the (nearly) eponymous food.

Those unfamiliar with the character (or simply forgetful of the spelling) could readily write *milktoast* when they mean *milquetoast*, but it's just a simple mistake.


  [1]: http://en.wikipedia.org/wiki/Milk_toast