+1 for this feature request.
When there is a relatively large number of notes, and I try to organize and make an outline of the new article or new idea, it will be very convenient, if drag-drop-to-create-block-reference were supported.
The work-flow I used is that: search for the content within the Obsidian, then put the relevant contents into the outline, and then update and re-organize the outline.
Currently, I copy-paste the text directly, because it is faster than creating block reference, I don’t want extra operation to break my thought. But the drawback is the source of the text (location within Obsidian notes) in the outline is lost. When I needs to review the outline a few days later, I may have to redo the search again to locate the source of the text I pasted in the outline, in case I needs more context from the original notes.
If the drag-drop can create block reference, that’s will be something very productive.