iPhone 5s enable dictation

Can you provide a screenshot of that message? I do not recall seeing that.

Okay, now I know what you are referring to. It has always been that way, and it is recorded and sent to the Apple server to process the dictation into text. You are free to do what you want, but if you used it in the past, that is the way it was handled. The same for any other dictation application. They all use the internet and send information to their servers and the send the text back to your device.

If you would like to provide feedback to Apple regarding your concerns regarding your privacy, you may do that at their feedback page HERE, and click on the appropriate link.

I read that Mountain Lion for Macs is offering offline dictation where the Mac does the translation instead of Apple servers. Hopefully this will come to iPhone IOS as well.

I rather doubt that will come to the phone given the restrictions on storage. With limited storage on the phone, you would not be able to store the program.

You're welcome.