Oops, I don't know why I said 3/8" (I might have been thinking my 3/8" drill instead of my 1/2" drill, IDK)... but, I meant 3/32" drill bit...

If the area gets drenched for too long and compacted, they start to drown. I did this once when I had my first worm bin. They crawled out of it and all over the house. I have never kept them inside since They absorb oxygen through their skin using a mucus that sticks to it. I had worms living in my aquarium gravel for 4 months before I dismantled it. They're kind of like fish, but they don't taste as good... I kid I kid

Anyway, in my experience the worms breed as long as there is adequate moisture. Just like in aquaponics, you want the proper balance of things (pH, moisture, temperature, carbon-to-nitrogen ratio, aeration, etc). It does not have to be drenched, and to keep the anaerobic bacteria from stinking your bin up, I would at most just mist the top layer as you rotate the material. However, there is Truth to what you say. I have noticed a majority of the eggs are in the bottommost of my bins that I don't turn often. The bottom of the bin tends to stay very moist and sometimes a bit like mud, but I think that's normal and it does not smell. I have noticed as well sometimes the worms find these little crevasses just under the lid that fill up with water when I spray, and they seem to be "doing their business" in the pools. Anyway, that's my 2 1/2 cents...

P.S. Have you seen the bins the University of Hawaii uses at their aquaponic facility? I really like their design, I am going to try their setup.