Is this gap normal

I found that a lot bmx bikes come with spacers that are way too big and have poor alignment right out of the box. I usually use a spacer that is a short as possible and then add if needed. It’s almost never needed. If your chain alignment is good it’s fine though.

I had this same issue with a low profile dust cover/washer. The cranks were still tight and everything functioned as it should, but cosmetically i didnt like it. Since it was a plastic washer, i just filed down the flange on the back of the washer that contacts the inner bearing race, until the gap was small enough to be in line with the bb shell/bearing.

Still functions the same, and now there is no dumb little gap that dirt can easily go in…Im sure its not 100% impervious to dirt as its not actually a seal, but its a hell of a lot better.