Today I was spooling some 50lb spiderwire stealth on to one of my reels and I noticed some of the green dye came of on my fingers where I was pinching the line. If I simply pinch it and pull it through my fingers a little comes off. Is this normal?

Yes. No worries. Use it long enough it will be white.

I agree. And don't worry about what seems to a little fraying. It's actually the factory coating they apply on the line. Has no detrimental effect what-so-ever.

Give it a year and it will be bleached white. But it still has it's strength.