Aha! "Now I see said the blind man"! When I posted yesterday, I had in mind the creations I've seen using the entire piece of clothing. Of course, you can use the knits from sleepers and work those up just as you would tshirt fabric with a stabilizer. My concern would be that the available fabric in each sleeper would be very small blocks, depending on the size of the sleeper. Newborn wouldn't make many blocks of any size worth working with.
I've seen the bears made of sleepers and they are darling. Those are a good way to preserve memories of babyhood. One of my friends makes those and puts a matching sleeper with them for gifts.