In the 13-14th century, for whatever reason, it was popular to switch a letter in the name for another. So William, or Will, became Bill. Richard, or Rich, became Dich or commonly just spelled Dick. It's kinda weird, but it just stuck

Jon's answer is interesting. I have to say that there are many nicknames in English that don't seem to follow any logical rules, and I don't think there's any answer except to say "it's so." Sometimes what will happen is that some person has an unusual nickname--a common explanation is that it is the way their little brother or sister mispronounced it--and then they become famous and people imitate it. Some very common nicknames without obvious logical explanations: "Peggy" for "Margaret" "Daisy" for "Margaret" "Sally" for "Sarah" "Hal" for "Harold" "Hank" for "Henry" "Sukie" for "Susan" "Polly" for "Mary"

Maybe because the B and the W sounds are both made using the lips. We go for what's clear and easy.

oh right, I forgot to ask that! I mean who would choose to be named dick? For what I learned so far, dick is not a very good word, in most cases.

If you think that is weird, how about "Dick" being short for "Richard"?