Quite frankly I doubt the humidifed O2 through the NRB did anything significant to the patient. While there could (eventually) be a problem with water accumulation in the reservoir bag, it pretty much has to get to sloshing water for a problem to occur. Best to avoid that... longer term you could have bacterial or fungal growth in the bag.
When you use a NRB, you have to ensure that there is sufficient flow to avoid CO2 trapping. What you're looking for is somewhere north of 10 LPM, often 12-15 LPM. You end up with an inspired O2 in the neighborhood of 60-90% at those flow rates. I really like the Oxymask for those times I need to give more than 4-6LPM via N/C as it's very titratable and usually more comfortable than a NRB, but you can't do a breathing tx through it.
Another thing to consider is that if your patient needs a high concentration of O2 for longer than perhaps a couple hours, you might want to consider asking RT or MD to think about CPAP or BiPAP therapy. Also consider that while you might have a patient with good SpO2 numbers, unless you're also measuring EtCO2, you might not see hypercapnia until it's very late thanks to hypoventilation. I had such a patient on my last shift. Did well by SpO2 numbers, holding 90's on 5-6 LPM by NC, started getting loopy and drowsy/tired. That's a warning sign... Pt ended up on BiPAP for a while and mentation greatly improved thanks to better ventilation.
On the whole, sounds like you were handed a patient that was initially OK for a Med/Surg or Med/Tele floor but decompensated enough to need a higher level of care. Your job is to basically be a tripwire, be alert to a need for increased level of care, and sound the alarm if/when it happens.
By the way, I'm an ED RN and a Paramedic. You are, even with a year or two on your floor, far more expert in taking care of those patients than I am. If I respond to an issue on your floor, I take care of the immediate issue and get the patient to a floor/unit that has the experts to provide care beyond the immediate situation.