The closest we have today is the multiquote feature: Select a portion of the post you're replying to, add it to multiquote, select the next portion, repeat as necessary, then click the "Insert Quotes" button to drop each portion into the reply with the appropriate opening and closing quote tags.
I don't find this technique very satisfying, as it requires me to decide exactly how I'm going to cut up the original post before I start composing any of my own text, and that's just not how I work. We used to have a button that would a piece of selected text in quote tags, and that came pretty close and I used it a fair amount.