This is a good suggestion - but not a new one. I was CEO at Riverview during the NDP government's  mental health reform at the end of the nineties. Although charged with closing beds, I realized that would be a mistake and convinced government to slow the process while we built more community programs. Our management team developed a plan for a "community of care" on the Riverview site, with our skilled staff providing specialized care until community alternatives were in place..
The Liberal government reversed that approach, but has never reported on how the savings from down-sizing Riverview translated into new resources, nor how the Riverview expertise was replicated. 
We should continue to de-stigmatize mental illness and develop community-based resources, but we will always need specialized facilities for the hardest to serve. And we need to level the playing field to ensure people have just as much access to mental health and addictions care as physical health care.