I tried creating a HT and stereo system years ago, and like you, I didn't have a deep wallet. I eventually ended up selling it and buying the best stereo that I could. The better the stereo, the better the imaging and if you sit close the center, you won't need a center channel. You already seem to realize that the expense of the rear speakers and amplification for them isn't really needed either.
It would be a different story if you had $40k or more to spend, but a really good stereo makes a really good HT. The problem most people have if they're not rich is that the cost of five speakers and sub, the processor and the amplification for everything causes us to buy a lot of lesser quality hoping that being surrounded by sound makes up for the lack of quality sound. I found out that for me, it doesn't!
It would be a different story if you had $40k or more to spend, but a really good stereo makes a really good HT. The problem most people have if they're not rich is that the cost of five speakers and sub, the processor and the amplification for everything causes us to buy a lot of lesser quality hoping that being surrounded by sound makes up for the lack of quality sound. I found out that for me, it doesn't!