Sound like it is too tight to me. I don't think it will wreck anything to run it like that, but it won't handle as well, and you will prob have to rebuild the diff sooner.
It is better to run it too tight than too loose. If you run with it too loose, the diff will slip instead of the slipper clutch, and will generate ALOT of heat and melt the diff gear in the tranny in very short order.