The writ of habeas corpus was also suspended in the Confederate States on several occasions, most notably to suppress opposition to the Conscription Act.
Whether the suspension of Constitutional liberties in the North and in the South was legal can be argued till the cows come home, but the fact is that, right or wrong, leaders of countries at war sometimes determine that extraordinary circumstances require extraordinary actions.
It's an on-going fact of life. Assertions have been as to the extra-legality of certain actions of President Roosevelt during World War II, and those of President Bush in the war on terror.
It all raises some interesting philosophical questions about the absolute need for victory and survival of the nation, versus the requirement to follow the rule of law and traditional virtues of justice and fair play.
BTW, it's not accurate to characterize President Lincoln as a "military dictator", even in hyperbole. By definition, a military dictator is a military man who rules by dictate. President Lincoln was a civilian, so he doesn't fit into that definition.