I'd say go ahead with what you're doing. You should do a compression test first to see if it's rings, valves, or both. Also, remember "Plastigage" is your friend.
I've got a couple that I'm doing that way now. One was a good runner except that it had stuck valves in two cylinders that wouldn't loosen up using the usual techniques. I'm just going to pull the valve assemblies on that one. The other ran great, had good oil pressure, but had a weird "rattling" sound when revved. When I pulled the pan, there was what appears to be a chunk of the thrust surface of the rear main about 1" long laying in the pan. When I get to that one I'll pull the rear main cap and see what's up. I discussed this with my machinist and he says it was probably a defective bearing or an assembly error.
When I was in high school and college, I did a bunch of engines this way. Sears had all the parts you needed dirt cheap and my mom would let me use her Sears card. For one engine, I scored a set of 7 almost new pistons from the local machine shop cheap (something went wrong with the eighth, I guess). An afternoon in the "piston pile" at Carmichel's Auto Parts produced the eighth. That engine was still running good 3 owners later.