Yes, I have used my router as a toolpost grinder;
There photos are just a mock up, as I took them to illustrate a different point to help someone on a Facebook group.

Bill

I have made a drilling spindle for the tool post using 6009ZZ plain bearings, an ER11 collet holder and a 170W BLDC motor.

I also made a milling spindle using AC7000 contact angle bearings, an ER11 collet holder and a 175 Watt Dremel.

For grinding, I prefer the Dremel milling spindle because it can run high RPM and the spindle is free of play. The spindle has a 3D printed adapter. I also made an adapter for a DC motor from an old cordless drill.

That's a lot of HSS to grind away. And by the time you get down to the smaller diameter, there will be little or no flute left. Step drills have smaller flutes on the small diameter part.

I thought that step drills were for sheet metal and the drills you are talking about were piloted drills.

But then there are the modern step drills that for sheet metal that start out at about 1/8" and go up in 1/6" increments to 3/4 or 1", alll on one drill. Very handy for sheemetal indeed. All I use these days for thin stuff.

Well there you go. They just look smaller because the outer part has been ground away. When you think about it, the flutes still have to go down to the size of the chisel point.

Still seems like an awful lot of HSS to grind away with a mounted point in a router, with an interrupted cut over the flutes. That kind of grinder set up is usually for taking a few thou off for finishing purposes. You might be better off to make up something to hold a pistol drill up square to your six inch bench grinder so the drill rotates the bit and the six inch grinding wheel does the work. I imagine it would go a lot quicker that way.

Looks like he has it all figured out. Simlar idea, hold the bit in pistol drill by hand and run it up against the belt sander. Then you could finish it off in th elathe.

But unless you are drilling many dozens and hundreds of these stepped holes, the more usual way to do it would be to drill the small hole then use a counterbore bit to drill the larger hole. Sets of counterbore bits are available stupid cheap from that large manufacturing country far to the east of you.

Or you can even drill the larger hole with a regular larger drill bit and then finish it off with a drill bit ground to a flat bottom end.

But if you plan to be drilling more than a few dozen such holes, then the step drill would be a definite timesaver.

The difficulty with that approach is that the pilot and counterbore are available in only specific combinations of sizes, generally a clearance hole for a nominal fastener diameter and a standard counterbore diameter.

In addition, the length of the small diameter may not suit the OP's particular application.

If you want something other than standard metric sizes, a longer pilot or a tighter counterbore than is usual, there will not be an off-the-shelf solution.