Yes, I have used many blankets for filling of a quilt. I make youth sized quilts for the veteran's hospital near me. All my friends, when they have a worn, faded blanket donate them. When I run out, I go to a thrift store. The quilt pattern on the top and the colorful lining, along with the blanket makes a wonderful addition for the totes I place them in for carry home.
So far in the last 3 years, I have made and donated 179 quilts. Working on one a day now for Christmas. Have lots of fabric. Am moving and can't take it with.