If you disallow search engines from fetching the /dev URL-paths (as you have done) then they will never see your redirect, and so will continue to list the /dev URLs in search results.
Remove the robots.txt Disallow so that they can fetch the URLs, receive the redirect, and take action on it.
In order to make /dev accessible through your dev.mysite.com subdomain, you will need a more-sophisticated approach. The usual solution would be to include
Options +FollowSymLinks
RewriteEngine on
#
# Externally redirect only direct client requests for /dev<anything> URL-paths to dev.mysite.com<anything>
RewriteCond %{THE_REQUEST} ^[A-Z]+\ /dev(/[^\ ]*)?\ HTTP/
RewriteRule ^(.*)$ http://dev.mysite.com/$1 [R=301,L]
in /dev/.htaccess, for example.
Such an approach corrects direct HTTP client requests for the 'hidden' dev directory-path, redirecting them to the dev subdomain URL without interfering with your internal rewrite or Alias which maps dev.mysite.com URLs to the /dev filespace.
However, if any additional rewriting is taking place in any .htaccess or config file above this one, it will be necessary to place this rule (with some modifications to the RewriteRule pattern) ahead of those URL-to-filepath rewrites in order to avoid exposing internal filepath info in a URL as the result of this redirect.
General rule: Taking into account all server config files and all .htaccess files in the directory-path to the requested resource, all applicable external redirects must be invoked first, followed by any internal rewrites. Otherwise the rewritten-to internal server filepath will be exposed as a URL to the HTTP client.
Jim