Yes! This is possible and allowedIf somebody only wanted the off peak Oyster discount in London (or other rail), can they simply buy an annual season ticket for somewhere within the gold card zone with no intention of actually doing that journey?
You'll also need the accompanying photocard!Make sure you always carry the season ticket with you. I was once stopped just inside the barriers at a tube station and asked to show my entitlement to the discount, which of course I could do. There must be a "discount" light on the rear of the ticket barriers, as the inspectors were stood there watching.
If you do sufficient travel off-peak, it's a no-brainer money saver. I buy one every year and have usually broken even by May/June, even with my limited business travel.