I would think this could be a good thing.
If it was flush, the back side of the hammer would put scrapes and wear marks of the face of the lock plate.
Just make sure all of the screws are tight on the back side of the lock.
Try seeing if the axle will wobble without the hammer installed, this will let you know if you need to replace it.
As to how this happened, I would suspect that over the course of 25 years, the screw that holds the hammer in place (on the front side of the lock) was over tightend, thus drawing the part of the tumbler that sticks through the lockplate further out, making the gap.
If the hammer was drawn down too tight, the back side of the hammer will show marks from the exposed axle.
If you file the axle flush with the lockplate, remember to file the top of the axle too the same amount, so the hammer screw will tightend against the hammer again.
One note: Was the lock made this way?
Check the hammer itslef, maybe the wobble is from a worn hammer, not the axle.
It might be better to first place a washer under the hammer screw (just to see if the hammer will not wobble when installed) it it is tight, them instead of going through the trouble of filing the axle, just shorten the screw a bit, this will keep the screw from bottoming out in the hole and pull the hammer tight against the axle.
Work slow, it is too easy to remove metal, it's harder to add it.