Discussion Forum—A Way with Words, a fun radio show and podcast about language

This expression is an idiom that, to my ear, is quite old-fashioned. It has the ring of a social environment of bygone days. It expresses surprise, or interest, without actually requiring additional information. The interest it expresses can be supportive, prurient, skeptical, disapproving, or otherwise.

Do tell.

It appears in John Russell Bartlett's A Glossary of Words and Phrase Usually Regarded As Peculiar to the United States (1848, Bartlett and Welford, New York, p119)

DO TELL.

in which it is declared

A vulgar exclamation common tn New England, and synonymous with really! indeed! is it possible!

A bright-eyed little demoiselle from Virginia came running into the dairy of a country house in New Hampshire, at which her mother was spending the summer, with a long story about a most beautiful butterfly site had been chasing; and the dairy maid, after hearing the story through, exclaimed, "Do tell!" The child immediately repeated the story, and the good-natured maid, after hearing it through a second time, exclaimed again, in a tone of still greater wonder, "Do tell!" A third time the story was told, and the third time came the exclamation of wonder, "Do tell!" The child's spirits were dashed, and she went to her mother with a sad tale about Ruth's teasing her; while poor Ruth said that 'those daown country gals were so strange; keep telling me the same thing over and over,--I never see anything like!"--N. Y. Com. Adv.

More modern references appear to be kinder.

Judging by the language in that story, it was told 90 or 100 years ago.   With that in mind, yes, I'd say the writer who used the word "vulgar" meant not "coarse" or "crude", as we would mean it today, but something more like "colloquial"; it's used by the common folk, but not in formal circumstances by the educated.   They might have said the same about "ain't".

I don't get "indignation" out of either "do tell" or "pray tell".   But I do agree (if it's what you meant) that "pray tell" is more likely to mean "I want to know more", and "do tell" to be just a meaningless exclamation of surprise.