Converted to STORE a scope, useful. You can make it very water and damp tight, and insulated. This will prevent damage from condensation. Biggest restriction for the size of dob is the width of the door opening.
As an obs, might be too small. You and a scope wouldn't be able to fit together. Only an altaz fork mounted SCT or Mak would fit in there, and only a small one, difficult too. And really only for imaging, and there are limitations to imaging with an altaz mount.
If it hasn't been used as a dunny for 30 years, might be an option to consider knocking it down and replacing the structure with a larger, purpose built obs. Will prove more practical.
Even if only rebuilt as an insulated, water, damp and bug tight, larger storage room for your scope and gear that you can then easily 'roll' out into the yard.
Two options already for the space occupied by the dunny!
In those pictures, there's also a couple of big trees behind the dunny, killing half your sky. You'd need to think about the viability of the site too for an observatory, unless those trees can be removed.
