It's totally natural to be hopeful when he made contact, and disappointed when he hasn't followed through.
You don't say what kind of issues are behind his behaviour - is he just generally unreliable and flaky, is he a drinker, some sort of personality disorder, etc. But people can sometimes overcome things like this and change their behaviour. It's hard, a little rare, and often doesn't come easy. But it can sometimes happen, and some of these problems do improve sometimes with age.
So of course you want to leave room for him to have some kind of relationship with your kids, if they want it, if he is in fact able to effect some kind of change in his life.
In my experience, the best way to deal with people like this is to remain open, but not invested. Keep the lines of communication open, don't be dismissive, but bide your time, see what happens, and protect your kids. If he reaches out and makes contact, think about what would need to be in place before you facilitated some kind of interaction with your kids. I think your instinct not to tell them much, or anything, without more from your ex, is spot on. This might mean you need to be hearing from him a bit more regularly yourself for a while.
It could be something like - ask him to show you he can stay in touch in a regular way for 6 months before you bring the kinds into things. Maybe suggest he start off by sending them a note or card with a birthday or Christmas gift, Whatever you decide, make it clear to him what the parameters are and that in the end it will be up to the kids if they want to see him, and that they have been hurt and may well decide not to. Sustained low level contact through things like cards and such might leave more possibility of an eventual meet, but it isn't a sure thing.
It's difficult not to get frustrated but I think the key is to remain aloof, no expectations but happy if he turns things around.
FWIW the letter you describe doesn't sound like the letter of someone who is managing to get his life in order. It sounds like someone who is still on the roller coaster, whatever that is.