Sure. On one project we built a custom Linux distribution by mounting a file as a loop back file system and copying the right files in. We installed a grub boot sector at the start. Then we copied it as a file into a simple live usb. The live usb also containing a script that used dd to copy the data from that file over the start of the first disk of a system you plugged it into. Nice quick install usb, minimal work.
We were installing into standard hardware so it was pretty good. But if your hardware varies this approach isn't great.
We could also have created a fresh filesystem on the device and untarred into it but we wanted to keep se Linux attributes.
dd'ing to the target device, and then growing the fs to the full disk extent seems to be a splendid idea. Especially as Linux tends to replace quite a lot of code over the usual curse of updates...
For a cluster system I had built a netbootable system for reinstall that would restore a dump of the reference system's fs on a node and adjust hostnames, ssh host keys etc... Also was quite fast at that time..
We were installing into standard hardware so it was pretty good. But if your hardware varies this approach isn't great.
We could also have created a fresh filesystem on the device and untarred into it but we wanted to keep se Linux attributes.