Who or where did you get the suggestion to turn ignition on? If the dolly has a swivel plate, you certainly don't need to leave ignition on since the car will pivot on the plate. If no swivel, then you might have to have ignition on for the steering to unlock. Check your VW, in mine I can insert the key, turn to unlock the steering, then turn it off. Steering will remain unlocked as long as key is in the ignition. You could use your 'valet' key to limit car functions if you feel it might be stolen.
Bob & Donna
'98 Gulf Stream Sun Voyager DP being pushed by a '00 Beetle TDI