Judith, if you're working large scale you'd either go thru a ton of blenders or would have to invest in a Hollander beater. You still have to color it and go thru the rest of the process. I don't see it any different than buying roving. Roving is just that until it's made into something else. ;-)
If you are using recycled paper or you soak them long enough, it depends on the fiber. Fibers like abaca (banana) are soft but long. Using a blender would probably cut more of the fibers changing their properties. You can save cotton pulp for a few months, then rinse with bleach water. But that is also timing consuming. And yes it does smell. The other alternative to saving is letting it dry out then rehydrating it with a beater on a drill.