Personally I think the dropdown selection works well as I have a few custom folders and they all appear in the dropdown. I think it might become tiresome to look for your custom folders under icons (would need tags the popup when hovering over an icon).
2.0's dropdown is a huge improvement from the 1.3's side scroll arrows...
I like the idea, I might implement this in a future version but as mav360 said the dropdown list is also a good improvement so hoping to be able to have both.
