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This actually should work, but getting drag/drop right on iOS devices is hard. They just don't have the CPU to rerender our sticker dragging fast enough to make it feel like you're dragging a sticker; you tap and drag and it never catches up to render so you never see it work.

We'll optimize the mobile experience and devices will get better, so the HTML version will be good enough at some point. In the meantime we will, at some point, invest in mobile Canvas apps (Android and iOS).

On iOS4, you need to trigger 3D acceleration to get acceptable redraw performance. You do this by using a 3D CSS transformation to move the object the user is dragging (translate3d with a z value of 0). The upcoming iOS5 is much better in this regard, and makes just setting .left and .top acceptable, so you could also just wait it out.

Google plus on iPad supports drag and drop in circles.

There are touch events and a touch API that make this possible.