Yep. This was a fairly common peice of software. Many, if not most, Commodore 64 games used re-designed text characters to make backgrounds. There is even a graphics mode for multi-color text characters. The VIC-20 also had these graphics modes, and virtually all non-text VIC-20 games used them.
And the Atari 8-bit machines, TI99/4A, MSX machines, and untold others also have this feature.