Do you want to copy a flat.vmdk with an I/O error to another datastore ? Then ddrescue is indeed the tool you need. ESXi does not come with anything that can acchieve similar results.
Option 1: split the one dd-command in x-lines each one using a count of 1 only - only makes sense if you have a good idea where the I/O error is located.
Option 2. use a Linux helper VM. Use sshfs to connect to the ESXi. Mount the target directory in writeable mode. Mount the source-directory in readonly mode. Change directory to the target directory and run ddrescue - dont forget to create a log-file.
Option 2 works very well - I use that a lot during my recovery work.
Option 3: it is really possible to install ddrescue on esxi but the work to do so makes no sense when compared witzh option 2.
Option 4: boot the esxi-host with a Linux LiveCD that has vmfs-tools installed - only makes sense if the USB-drive is the target.
Ulli
Feel free to call me on skype - I do this stuff almost every day ...