The main problem with having a moss terrarium is the external temperature of the room. Moss like it cold. That means the highest temps should be no more than 65F though some can handle it warmer for short periods of time.
Also water must be distilled not tap ever.
And moss does not like intense light.
Just what kind of substrate did you put your moss on?
You may want to get some felt and try it only on a couple of layers of felt, available at a yardage store.
{{gwi:600425}}

The moss is most likely dormant..Try keeping it away from the sun, and misting it often.

I would have to disagree with a carte blanche statement about mosses like Tm made. There are many mosses that require quite a bit of light including a number that can take full sun. Furthermore, many do not require cool temps ... temps in the 70's and even the 80's is fine depending on the type of moss and the locality to which it is native.

What kind of air circulation did you (via the kit instructions) provide? Also what kind of lighting?

Stagnant moist air, like that in a typical sealed terraruim, often provides perfect conditions for molds/fungi -- some types of which can lead to the demise of mosses or other plants.

Furthermore, if the terr was in a location wherein the sun shined upon it, then it is possible that temperatures in the terr soared to lethal levels. This would be even more problematic if the terr was sealed. (Think about a closed up car sitting in the sun for even a short length of time.)

Additionally, you must consider the stress the moss likely under went. Was the moss you used alive in a plastic bag? Sheet moss like that is often grown in conditions of extremely high humidity (frequently levels of 90-100% RH). The resulting vegetation is not adapted to tolerate suddenly existing in markedly lower humidity levels. When confronted by such conditions, massive die off is generally inevitable.

Hopefully the kit included media very similar to that which the moss was raised on. If not, that too may have been a part of the problem.

If there are still living sections of moss, yes it is possible that those living areas will grow to eventually fill out again. If the browned out areas of the moss are dry/crunchy, then desication was most likely at least part of the issue. If the brown outs are slimey, then fungi -- perhaps in conjunction with the other possible issues mentioned above -- may be the culprit. Slimy areas should be removed.

Happy planting!