yes, co2 really is a dry air source. The problem with it is that it could turn back to liquid under enough pressure. I don't think shocks can reach those pressures though.
Like I said we have used it for years with fine results. Racing we still use it but if we have the chance to use nitrogen we will, we don't own a nitrogen tank so most of the time it's co2.
Recreational wheeling I see no need for more than co2 ever.