Nay.
Two issues:
1) Low resolution = low image quality. Unless you're planning on running games at that resolution, this will be a problem. Even at 768, you'd have to be 5' away not to see the artifacts.
2) Low refresh rate = low image quality. Most inexpensive 768 displays only have 60Hz refresh. This will result in blurry images, again unless you're 5' or more back.
The whole idea for a gaming display is to be as close as possible, to induce a sense of immersiveness - meaning you feel like you are in the game, not just watching. If you are 5' back from a 32" display, that's not immersive at all. It's barely in the same room, in some cases.