I doubt that the water in the compressor line turns to steam. I would simply be a fine mist of water vapor.
And what if a few more drops of water condense inside the tire then would condense with nitrogen? It has been condensing in car and TT tires for years. Tractors even add water and antifreeze to their tires for weight.
It is true that Nitrogen reduces air migration through the tire wall, is that a problem? Do you wake up in the morning and find your car tires have gone flat from tire wall air migration?
There are no doubt a few highly specialized tire applications where nitrogen is useful. But the TT and TV tire have been doing rather well without it.