In Adobe Illustrator, a transform like above is a boring task. So I made a plug-in.
You can scale selected paths only toward the dragging direction with this plugin tool.
If you want to shrink the paths, keep pressing the shift-key while dragging.
The starting point for scaling is the location where the mouse button was pressed.
Tested with Adobe Illustrator CS5 15.0.1 / Windows 7 Pro 64bit
This is a beta software. Please use it carefully, at your own risk.
For more information, please read the included readme file.