Definitely. I'm surprised if you haven't heard that actually many people do this with their scraps. This way they are ready in an instant for whatever you need in 2.5" (for example--that is the size I like the best) sizes. I once had a whole bucket full.
But I've done it with 3", 4" 5" and 6". It is how I can have young girls over, bring over the plastic container of 6" squares and say, "Let's make something from these."