You can combine items to make ammo, but for most types, you make only one bullet with each combination. You'll end up using hundreds of items just to fill your pouch with ammo, which means hours and hours of gathering the materials. It's easier to simply buy ammo, since money is much easier to get.
Combining does serve a purpose, though. Since you can carry only a limited amount of each type of shot, you can take the items to combine for more on a quest. Also, only lvl 1 strength items can be purchased, lvl 2 and 3 must be combined. You might be able to buy/trade for the materials used in those shots, but either way, it is a huge grind to prepare a bowgun for each quest.
I have that bowgun from the rustshard, it is not a good one. It has the ability to fire multi-shot crag shots, which means it fires three in a row for the price of one, dealing triple damage. However, it can't use very many other types of shots, and has small clip sizes for them (it can't use recover shots or power/armour shots, so it offers no support). You can carry only 9 crag shots, and materials to make 9 more, which isn't enough to be worth it.