Hey, yea I did that last year in May and it was a great spot to spend the night. The closest water is about a mile away from the dome in Royal Arch Creek but its definitely worth carrying the extra weight for the view. In order to be totally legal I believe you have to be a half mile or so from the rim. There are a few established campsites in the trees right on the trail before you get up on the dome itself. You will need a permit for any overnight trip in the wilderness but for that area you won't have any trouble getting one. Have a good trip!
Here's a pic from my campsite
Chris