That works, but you're wasting resources. There are certainly some pretty good (and very cheap) AVR receivers out there today.
There is, however, still a major reason why it isn't the best way to go. First, with the receiver, you *are* paying for the amps - whether you use them or not. You can figure that the cost is split about in half, so, if you buy a $300 receiver, you are getting a $150 pre / pro and a $150 power amp (instead of buying a $300 pre / pro). Second, combining the pre / pro and power amps in one chassis requires *technical* compromises.... which means that you don't quite get something as good as two $150 separate components.
Honestly, though, if you're more concerned with features than with absolute audio performance, at the bottom of the pile even a $150 receiver will do an awful lot - and will sound at least decent doing it..... combining that with a good power amp will sound pretty good right away, and you can upgrade the receiver to a good pre / pro later (and put the receiver in the den or the basement). A $500 pre / pro will almost certainly sound better than the processor section of a $500 receiver, but there simply aren't any $150 pre / pros - and there are $150 receivers.