For VST2 instruments yes. Go to the folder where you installed Cubase, in that folder is a folder called VSTPlugins. That folder has the same layout as the dropdown menu in Cubase. You can move the .dll files around to match the way you want to see them in Cubase.
However, VST3 instruments don't work that way, their category is set by the manufacturer and can't be changed easily.
Software: Steinberg Cubase Artist 6.5.5 64-bit.
Hardware: HP elitebook 8530b with W7 Home 64-bit
Mackie Onyx 1620i - Steinberg Midex 8 - Steinberg CC121.
Analog: Alesis M1 - Behringer Powerplay Pro-XL - Studio Projects C3 - AKG K612Pro
Instruments: Yamaha DTX750k - Yamaha MO-6 - Waldorf Blofeld - Korg Wavedrum WDX.
3rd party plugins: Native Instruments Prism - Rob Papen Distort - Rob Papen DelayMy humble contributions to what could be considered music.