I think this sounds like an interesting UX challenge!
It definitely doesn't have to be a bad idea, if you think it through and make the action transparent and easily controllable I believe it could be a good interactive attribute.
Some things to consider:
- How will a user move items further up/down the list?
Conventionally, looking at file explorers etc, I would say the user grabs an item and moves it towards the edges of the list making the list scroll faster when the item is closer to the list's top/bottom.
- Won't that make it hard dropping it in the right title/category if the list is scrolling fast?
It could, unless you design around that. Add a visual indicator that clearly shows the user where she is in the list, and also where she need to go to get to the desired title/group. Just a quick mockup:
download bmml source – Wireframes created with Balsamiq Mockups
The title scroll to the right appears when an item is dragged. As the user moves the item and the list starts scrolling so does the title scroll, showing the user on which title they are and in which direction they should drag the item. Another cool feature could be if the user could simply drop the item in the wheel on the desired title/group.
This is just a quick mockup, and it needs more thought I admit. I hope you can find some inspiration in my post however!