Do it. Absolutely do it!
My father was a letter writer, and my mother & grandmother saved ALL of them from college to home, from WWII to home and to my mother, and then again from college to home and to my mother. He also kept many of their letters to him at college, and even a few he received while serving in the European Theater from 1944-46. When my grandmother died, my mother took her box of letters. When my mother died and my father remarried & moved into his new wife's home, my sister took all of the boxes of letters as my stepmother "didn't have room" for most of his stuff. (He got to bring his clothes & his one favorite chair, which was banished to a room in the basement where he would go to watch TV).
About 6 months before my father turned 80, my sisters & I got the same idea you did. They very painstakingly typed all of his letters into MS word files, complete with mispelled words and typos (the ones he wrote from college were nearly all typed). They sent those files to me and I compiled them in date order, using different fonts for the different authors. I used pictures from the different years as "chapter covers". We had the whole thing printed up and bound, and we gave a copy to him, to each of his grandkids, to his brother & a couple of his brothers kids that were close to him, and each of us kept a copy.
We probably could have scanned them all and done it that way, but they were hard to read at times. We did scan the drawings he had made (cartoons, maps, etc) and included them in the book. The book gave my sons a fascinating look into my father's youth and service.
