Sphagnum: ok for substrate?

I have a large quantity of milled sphagnum; looks just like the ground coconut fiber that comes in bricks. Is this OK to use for a substrate? It is bug free and clean, untreated.

Is it going to be dry or wet. Dry, maybe, never used it or seen it used...wet, definitely not...thats asking for skin problems given the ball would be sitting in it constantly.

I would be using it semi-dry, a little moisture just to hold basic humidity. Definately not planning on using it sopping wet. Its consistency is the same as the coco fiber that I use for my horned frog; it holds moisture well without being damp.

I'd be hesitant to use it throughout the enclosure regardless of how wrung out you got it - but if you were to say set it up in a litter-box sized pan or make a humid hide and use it in there it would serve to elevate humidity throughout the enclosure.