In this paper we investigate the role of dissipative drift instability in exciting needle-like short scale density structures recently observed during ionospheric heating [Kelley et al., 1995; Franz et al., 1999>. A two-fluid model for a warm, collisional plasma column, representing a typical density striation is used to derive a dispersion relation for drift modes. It is found that unstable drift modes can be excited. More accurate nonlocal eigenmode analysis reveals that for Arecibo parameters, the m=3 mode is most unstable. Mixing-length estimate of the density spectrum indicates a k-2 scaling in reasonable agreement with the observed spectrum. ¿ 1999 American Geophysical Union