It just might. I am running one test game and was fairly agressive about IC upgrades. Once the purge 10% dissent hit was cleared, I took 240 IC for about eight months to upgrade all the existing units to medium tanks and 39 infantry and current birgade techs. During that time, I could have used that 240 IC to make 4 medium tanks and 164 infantry divisions. This would be about 30 divisons more than USSR currently has, althrough without birgades. Note that going the disbanding route, I would not have had to repair existing divisions or feed them during the 2 years, which would mean I would probably a huge supply stockpile.
Might be the best course of action is to disband all the units which need repairs and all cavs, leaving you with about 60 divisions or so and all the motorized inf, which won't need upgrading till 41 techs. And of course, build IC like heck for the first 1.5 years, so they finish up early 1938 when your 39 tecs become available. So, when you begin production, with less to upgrade, you can begin production sooner, which means by fall 39 you will have around 200-220 divisions, with about 20 being medium panzers and more on the way.
One interesting sidenote is the the Engineer birgade becomes even more useful. It's the only birgade which you don't have to upgrade, so you can build them early and not have to upgrade again and again, etc.
