For a rough approximation, it's better than nothing.
However, the MOSFET on resistance changes with temperature, which can lead to thermal runaway. It's close to double at the upper end of the temp range. This would lead to an under-estimate of the maximum temperature rise.
On the other hand, while thermal conduction to other parts of the PCB is linear, the heat is mostly transferred to the external environment by convection (and possibly some radiative cooling), both of which are non linear, transferring more heat as temperature increases. Its a bit hard to model these effects.
You can pretty accurately calculate the worst case power dissipation given a maximum junction temperature. If the issue is being able to dissipate enough power in the FET with your power supply, you can reverse bias the FET and dissipate energy in the body diode. It has a higher voltage drop, so you can dissipate more power internal to the device with a limited current.