From memory: the outer race should be seated very firmly in the bearing housing (i.e. pressed in). The inner race and roller bearings should form a taper (from memory) which locates them radially - from memory there is plenty of clearance between the inner race and the housing. When the driveshaft is done up it pulls the outer and inner race together and the taper sorts out the positioning. The dust cover is just that, minimal spacing.
What you've got there looks OK, but the dust cover needs to be pushed down to contact the bearing - the driveshaft then covers the rest of the bearing up.
Hope that helps some
Edit: If the outer race is not large enough, I seem to remember there's a couple of types of different bearings for the sierra rears; ABS and non ABS. One is smaller than the other. Personally I somehow ended up with Granada bearings on my first attempt! :/