The dam is believed to have burst after days of torrential rain led to a large lake bordering the low-lying residential area of Cirendeu flooding.
A huge section of the 76-year-old, Dutch colonial-era dyke gave way, causing more than two million cubic metres of water to cascade through the breach.
Residents have blamed authorities for failing to repair the dam after it was weakened by previous floods.
Aldi Rojadi, 34, whose house was damaged, said there have been reports of leaks for years and that someone should be held accountable.
The ministry of public works has promised to investigate the claim.
Rohmat, a 30-year-old man whose house was also damaged, said: "Whenever these thing happens, officials throw around blame, but really, what can we do about it? Nothing. We just have to accept it," he told the AP news agency.
Wahyu Hartono, a former ministry of public works official, blamed budget shortfalls for the disaster.
He said: "We need to find a way to take better care of these Dutch-era dams otherwise there will be more problems like this.''
Most of the water had receded on Saturday, leaving behind streets covered in
mud and debris.
Cars that had been parked in driveways were swept hundreds of metres away and streets were strewn with residents' personal belongings.
|Cars parked in driveways were swept hundreds of metres away by the flood [EPA]
Some residents left homeless stayed in a university hall on higher ground.
Abdul Hamid, a resident, said: "What we urgently need are mattresses, blankets and clothes.
"I don't have anything anymore - all I had was swept away by the water. I don't have clothes for my children and my grandchildren."
Hundreds of people have gathered to identify victims at Muhammadiyah University, which has been made into a makeshift morgue.
Rustam Pakaya, an official with the government crisis centre, said four field hospitals had been set up to accommodate more than 180 wounded people, some with broken bones, head wounds and severe cuts.
Some residents said they had been overwhelmed by the scale of the flooding after the dam burst.
"It was like being in the middle of a tsunami," Minu, a local resident told Detikcom, a news website.
"People were screaming, 'The water's coming in, the water's coming in!' and our dog was barking."
Floods and landslides are common in Indonesia during the wet season, which falls around the northern hemisphere's summer.
Floods in the capital left more than 50 people dead in 2007.
Critics said overdevelopment, poor city planning and clogged drainage canals were partly to blame.