Why would that be a bad idea? China needed to industrialize as quickly as possible and for this it needed a lot of steel. It could not produce that steel itself in factories on a sufficient scale because of the lacking level of industrialization. It was sort of a chicken and egg problem. You needed steel to build the factories but you needed the factories to make the steel.

Its only options therefore were either to import what they needed, which was not really possible without unacceptable concessions to foreign powers (by this point the relations with the Soviet Union had declined significantly, and of course the West wouldn’t help a communist state), or to use a decentralized/distributed approach employing cheap and technologically feasible artisanal production methods but scale things up by having millions of people do it simultaneously.

In this way they utilized two of their greatest strengths: the unparalleled ability of a communist party for mobilizing the masses toward a common goal, and the large population size of China. They were able to multiply an otherwise small scale process up to the enormous quantities needed to fuel their nascent industries.

Obviously the quality and consistency of the steel produced in this way was not up to that which you would get from industrial production, but it was good enough for the purpose. And what other choice did they have? This was a difficult period, but it was a necessary step on the road to industrialization without which China would not be where it is today.

The end result being that something which took the first industrial powers centuries to do, China did in the span of a less than a decade.