I do it. It's become a joke with my MIL (who also does it) - we keep giving each other the same paper back and forth!
I actually learned from her that with the help of an iron, you can make used paper and tissue look like new, and no one ever has to be the wiser...
It's not as if someone's self-worth ought to be tied up in whether or not they get brand-new gift wrap to rip off of their gift... but that's my humble opinion.