There is no reason why a smallblock V8 can't be swapped into a 914 with any negative effects other than increased weight.
On the issue of weight transfer, obviously you're going to have to revise your suspension setup if you're going to change the weight distribution of the car by any considerable margin, but it's nothing earth shattering.
Structural rigidity is another issue, so chassis stiffening becomes neccessary, but there are bracing kits you can buy, and a roll cage will dramatically improve your cars torsional stiffness.
The biggest advantage to a large displacement pushrod V8 is gobs of torque. A 5.7 liter engine even in a moderate tune will still make better than 350 ftlbs, and as long as you don't have too wild a camshaft, it will make it over a wide range of engine speeds, and make for a very responsive car. Say what you will, a 2 liter engine will not make all that much low end torque, especially if it has been tuned with longer duration camshafts, headers, etc. There are things that can be done to combat this, like variable valve timing, supercharging, or a small ball bearing turbocharger, but it will still be a 2 liter engine.
That being said, my preferred swap for a 914 would be a 3.6 liter 964 or 993 engine, it's much lighter than a smallblock V8, makes about the same power, and still has more than enough torque to move a 914 around town quite spiritedly.