In the olden days of Trainz, before I got TransDEM, I built all my routes this way. It can work but I have found it actually takes a lot of extra work doing so so now I use the old "cheese-slicer" tools from time to time mostly to fix merge points where the two routes don't quite line up like they should. Done judiciously with the built-in tools, it can be difficult to tell which is which.
A good compromise are the displacement maps, however, These can create a nice random terrain, which can be smoothed out and blended using the built-in tools, but save all the work creating the hills and valleys. Over the years, I've gotten quite adept at dragging the fill area over multiple baseboards to create a large area ready for track laying and texturing, and asset placement. One of the challenges that comes out of a terrain like this is determining the best route for the rails especially when the terrain is quite steep.