I was in the backcountry camping this weekend and had a bit of a dilemma. You're not supposed to camp within 200ft of trail, water, or shelter on the section of trail I was on. However, there was a pretty well-hidden (but well-worn) area right off the trail that obviously gets used quite a bit. It was probably 50ft from trail and 100ft from a stream. I decided to make camp there rather than tearing up a new spot in the woods but I was paranoid that I would get a lecture every time a hiker passed. I think I did the right thing. Did I?

Technically, no. Trail crews usually try to obscure those types of spots. But, rather than make a new spot close the trail, you did the right thing. It is more important to be further away from a water source than it is to be too close to a trail. A spot too close to a trail is more apt to be used by more and more people until vegetation is worn away. The closer one is to water the more likely that source is to be contaminated by human waste, plate and cookware cleaning, toothpaste and liter.

IMO, LNT trumps following that specific rule exactly to the letter.

If the area was "pretty well-hidden" how would passing hikers know you are there? I'd rather pass a well concealed campsite 50 feet from the trail than an obvious campsite, say across a meadow, 200 feet from the trail.

I agree. Our goal with every campsite is to leave it in better shape than we found it---and that does NOT include improving the site with rock or tree furniture. If there is an obvious campsite that is frequently used, and you can use that without making it worse, that's the first choice.

Second choice is to use a site and leave it pristine...to the point of replacing any pinecones that you may have moved to make your bed flatter. I love it when someone looks at our campsite as we leave and can't tell that we were ever there.