I would send the letter - but put somethign about you weren't sure if she wanted to continue contact, and then leave it up to her, she may be feeling the same way and life can sometime get just too busy.
I would get back in touch if I were you, I think. There could be any number of reasons she let contact lapse, but after a while goes by it gets awkward and difficult to get back in touch, especially if you're not sure it's welcome. If you give her a prod she might be relieved to take up the opportunity, and it seems nice for your dd to have at least one person on that side of the family worth knowing. As far as I can gather, a court wouldn't enforce contact between your ex and his child if it was against her interests and she can express an opinion on it, so I wouldn't worry too much about that.