First, there are a lot of people that make decent knives out of "found" or mystery steel.
There are also a lot of people that make knives out of mystery steel that don't perform all that well.
There are a dozen or more very good reasons not to re purpose steel.
Some of the reasons include:
- micro fractures are hidden by nature and the knife can/may fail during quench or use. That is a lot of work to put into something only to have it fail.
- it might get hard but will it hold an edge? If you don't know the carbon and alloy content, it's hard to know if it will hold an edge.
- fresh, new steel for forging can be found pretty cheaply. not free, but just a few dollars a blade. This is insanely cheaper than putting several hours into a mystery piece of steel only to have it fail but not holding an edge or cracking.
- cleaning up mystery steel can take quite a bit of time that could be better spent on new steel. Time is money.
- you have to research how your mystery steel works or you are almost certainly setting yourself up for problems later with a poor performing blade. reputation is everything in this business and you don't want a bunch of old, bade blades coming back to haunt you.
If you have a repeatable supply of mystery steel that you can spend time with testing, you might be onto something. Lot's of guys make decent knives out of 5160 end cuts from their local spring shop. That's not really mystery steel though. Certain John Deer tractor parts were and probably still are used by quite a few guys. It was tested by several guys and found to be fairly useful.
Here's something to think about. When you knife smith full time or even part time and you talk to people about it, there is always -- ALWAYS someone that says they have some steel to sell/give/swap for a finished knife. Almost no one takes them up on that offer. The vast majority use fresh, known steel for a reason.
To be sure, general blacksmithing can make use of nearly any kind of steel. Knifesmithing requires steel to perform in a certain way and without knowing exactly what you have, you are going to have to spend some time testing and even after testing, it could fail due to fatigue.