Let's say you take a 256 bit key and never use it to encrypt anything. You receive a message with a 16 character unique randomly generated salt pre-pended. You salt your key with the 16 character salt and run it through SHA-256 to create the encryption key used for the first block with AES-256. Afterwards, you take the first hash-resultant key, append the original unused encryption key, hash the result with SHA-256 and create the key used to encrypt the next block. Each block's encryption key is the previous key appended with the never used encryption key hashed with SHA-256. Let's say you used this method in CBC mode. How would it compare to AES-256 used in conventional secret key CBC mode in terms of security and performance?
Also, would this still qualify as block cipher encryption or am I talking about a something that is almost starting to resemble a stream cipher here?