You aren't using v0.22 because that gives an error trying to access paper.tool. So I assume you're using the nightly build.
When you call
paper.view.center = newCenter;
It does
this.scrollBy(Point.read(arguments).subtract(this.getCenter()));
So you are scrolling the view by the difference between the previous center and the new center.
It looks like event.delta comes from
this.tool._point.subtract(this.tool._lastPoint)
Apparently _lastPoint is a function of the view.
I'm not completely clear on how the process gets started, but what's happening is that when you scroll the view it messes up the next event.delta.
I'm seeing an event.delta.x of say 20, which causes the view to scroll 20 points to the left...then I drag the mouse a single point and I see an event.delta.x of -19... which causes the view to scroll 19 points to the right. and it keeps bouncing back and forth.
Because the view scrolling is showing up in the event.delta, it affects the next view scroll, which affects the next event.delta....and so on.
path.position += event.delta;
So instead of moving the view, move the Item.
However, if you must move the view, it looks like event.event.x and event.event.y are unaffected by the view scrolling...so if you remember the lastPosition yourself you should be able to make it work. There may be other x & y values in event that would also work.
~Ryan