I, too, would like to have this feature. It is a very convenient way of syncing two generalized source and target locations for copy and backup purposes.
Also, a more useful warning message would be something like ""An older item named "name_of_file" already exists in this location. Do you want to replace it with the newer one you're moving?" This gives the user more information regarding the source and target locations and can make a more informed decision whether to stop the operation or continue with the replacement.