No, that’s not the case. All textures you are blending would be uploaded to the GPU and you would pay the cost of accessing all those textures for every fragment you are rendering.
Unless, that is, you use render-to-texture or a compute shader to do the blending once and store the blended result in a new texture, and unload the original textures. You would still pay the cost of uploading the textures, though.
Blending with PNM isn’t a bad idea then, if you’re willing to pay the CPU cost (ie. increased load time for your game). You could probably cache it on disk after you’ve blended a particular combination. That said, if your current approach is working, I suggest you don’t spend too much time on it unless you’ve identified it as having a significant impact on your performance.