High levels of moisture in breathing air makes it uncomfortable to breath and increases the risk of bacteria growing in the system which is a potential health risk. If humidity levels are too high in the compressed air, there is a risk of moisture condensing. This can cause airlines to become blocked, or cylinders to corrode.
The European Standard is EN12021:2014 which comments Compressed breathing air shall have a dewpoint sufficiently low to prevent condensation and freezing. Where the apparatus is used and stored at a known temperature the pressure dewpoint shall be at least 5 °C below the likely lowest temperature. Where the conditions of usage and storage of any compressed air supply is not known the pressure dewpoint shall not exceed -11°C