Dielectric constant and dissolution of ionic salts
The dissolving of a substance into a solvent and the avoidance of contact ion pairing depends on several things. The dissolving relates to the change in Gibbs free energy between the crystaline solid and the solution of the cations and the anions from a salt. A Born-Haber cycle can be used to explain this.

You should be aware of the fact that the Debye-Huckel and extended Debye-Huckel equations for the activity coefficent for ions in solutions have terms in them for the relative dielectric constant of the liquid.

The higher the activity coefficent then the more the ions are able to move freely of each other. The extended Debye-Huckel equation can be modified into the Bromley equation by adding another term for ion-ion interactions.

When considering the effect of changing the relative dielectric constant.

I think that one of the best examples is sodium bromide, in water sodium bromide is a strong electroyte where the cations and anions are well separated. But in acetone where the relative dielectric constant is lower the same salt is a "weak electroyte" where the cations and anions tend to associate with each other.

I think that the formation of contact ion pairs is the first step when going from a perfect solution of ions to a crystaline ionic solid. But the water does more than act as a simple dielectric. What the water molecules will do is to bind to the ions. In particular the water molecules will coordinate as Lewis bases to the cations and then enlarge the size of the cations. This binding of waters can act as a bridge between the cation and the water.