I would go for it if you could get it cheap (that is, for a little above scrap value) . then you can sell it for scrap if it does not work out and only lose a little. Sounds like it would be more solid and precise than most routers, and capable of fast moves since those are the characteristics that pick and place machines excelled at.
I built my cnc router by modifying a machine that was used for interpreting the film shot by U.S. spy planes. It has worked out great. 32" x 32" actual cutting area with a Hitachi 2 1/4 hp variable speed router. Total including all parts was $600.