Is it OK to use the USB 5v pin as power source?
Usage that is within the USB spec and you wired it correctly, yes.  

Normally that means 100 mA without negotiation, 500 mA with (though the distinction is rarely enforced), and potentially more in some follow-on versions.

The answer would ultimately depend on the type of LED utlized - your common small indicator ones typically should be run with 20 mA or less (you did use a resistor, right?).

But if you are talking some sort of LED illumination light or adapted flashlight, then quite possibly you are stressing components beyond their designed capability. 

Doing something like putting a huge LED (or parallel array) directly on a port and counting on the port's likely but not certain resettable polyfuse protection feature (or any pre-trip resistance of it) as the current limit would be a very bad idea.