It's not unheard of and some work has been done to study if this would be beneficial (with promising results)[1]:
But I offer as evidence two papers[2] in 2005, one in Nature and one in Science. They both did mathematical modeling with influenza, to see whether saturation with just Tamiflu of an area around a case of influenza could stop the outbreak. And in both cases, it worked.
Which is really all that most countries are doing. In doing so also they're buying time by decreasing the number of people that get infected per unit of time, thus increasing the likelihood that more people will be infected later when possibly better treatment options exist and/or a vaccine.
But I offer as evidence two papers[2] in 2005, one in Nature and one in Science. They both did mathematical modeling with influenza, to see whether saturation with just Tamiflu of an area around a case of influenza could stop the outbreak. And in both cases, it worked.
[1] https://www.wired.com/story/coronavirus-interview-larry-bril...
[2] Journal references: Nature (DOI: 10.1038/nature04017) and Science (DOI:10.1126/science1115717)