You are asking if it is possible, you example clearly shows that it is. I think you want to know how to read the text file after you have created it. In that case, you can follow the answer in this question: Read a local text file using Javascript
JSON is simply a formatted string that allows JavaScript to reconstruct objects, that means you simply store a string to the text file, then read it again, and convert it to object by using JSON.parse().
Here's a working example:
(function () {
var textFile = null,
  makeTextFile = function (text) {
    var data = new Blob([text], {type: 'text/plain'});
    // If we are replacing a previously generated file we need to
    // manually revoke the object URL to avoid memory leaks.
    if (textFile !== null) {
      window.URL.revokeObjectURL(textFile);
    }
    textFile = window.URL.createObjectURL(data);
    return textFile;
  };
  var create = document.getElementById('create'),
    textbox = document.getElementById('textbox');
  create.addEventListener('click', function () {
    var link = document.createElement('a');
    link.setAttribute('download', 'info.txt');
    link.href = makeTextFile(textbox.value);
    document.body.appendChild(link);
    // wait for the link to be added to the document
    window.requestAnimationFrame(function () {
      var event = new MouseEvent('click');
      link.dispatchEvent(event);
      document.body.removeChild(link);
  });
    
  }, false);
})();
  var fileInput = document.getElementById('files');
  var fileDisplayArea = document.getElementById('test');
  fileInput.addEventListener('change', function(e) {
   var file = fileInput.files[0];
   var textType = /text.*/;
   if (file.type.match(textType)) {
    var reader = new FileReader();
    reader.onload = function(e) {
     fileDisplayArea.innerText = reader.result;
    }
    reader.readAsText(file); 
   } else {
    fileDisplayArea.innerText = "File not supported!"
   }
  });
<textarea id="textbox">Type something here</textarea> <button id="create">Create file</button> 
<input type="file" id="files" name="files" multiple />
<output id="list"></output>
<div id = "test">
</div>
 
 
Save your json string to text file, then read it. This is just a guide.