Well, I found bits and pieces of the solution scattered among mailing lists. I've come up with a nice modular chunk of code that you can drop in and use... here it is:

class DraggableLegend:
    def __init__(self, legend):
        self.legend = legend
        self.gotLegend = False
        legend.figure.canvas.mpl_connect('motion_notify_event', self.on_motion)
        legend.figure.canvas.mpl_connect('pick_event', self.on_pick)
        legend.figure.canvas.mpl_connect('button_release_event', self.on_release)
        legend.set_picker(self.my_legend_picker)
    def on_motion(self, evt):
        if self.gotLegend:
            dx = evt.x - self.mouse_x
            dy = evt.y - self.mouse_y
            loc_in_canvas = self.legend_x + dx, self.legend_y + dy
            loc_in_norm_axes = self.legend.parent.transAxes.inverted().transform_point(loc_in_canvas)
            self.legend._loc = tuple(loc_in_norm_axes)
            self.legend.figure.canvas.draw()
    def my_legend_picker(self, legend, evt): 
        return self.legend.legendPatch.contains(evt)   
    def on_pick(self, evt): 
        if evt.artist == self.legend:
            bbox = self.legend.get_window_extent()
            self.mouse_x = evt.mouseevent.x
            self.mouse_y = evt.mouseevent.y
            self.legend_x = bbox.xmin
            self.legend_y = bbox.ymin 
            self.gotLegend = 1
    def on_release(self, event):
        if self.gotLegend:
            self.gotLegend = False
...and in your code...
def draw(self): 
    ax = self.figure.add_subplot(111)
    scatter = ax.scatter(np.random.randn(100), np.random.randn(100))
legend = DraggableLegend(ax.legend())
I emailed the Matplotlib-users group and John Hunter was kind enough to add my solution it to SVN HEAD.
  
On Thu, Jan 28, 2010 at 3:02 PM, Adam
  Fraser 
  wrote:
    
I thought I'd share a solution to the draggable legend problem since
    it took me forever to assimilate all the scattered knowledge on the
    mailing lists... 
  
Cool -- nice example.  I added the code to
  legend.py.  Now you can do
  
leg = ax.legend()

  leg.draggable()
  
to enable draggable mode.  You can
  repeatedly call this func to toggle
  the draggable state.
I hope this is helpful to people working with matplotlib.
                Note that this is a great but really old version, and you should better use set_draggable (see my answer  below)
                    – borgr
                Dec 11 '18 at 5:38
def draw(self): 
    ax = self.figure.add_subplot(111)
    scatter = ax.scatter(np.random.randn(100), np.random.randn(100))
    legend = ax.legend()
    legend.draggable(state=True)
If you are using matplotlib interactively (for example, in IPython's pylab mode).
plot(range(10), range(10), label="test label")
plot(range(10), [5 for x in range(10)], label="another test")
l = legend()
l.draggable(True)
In even newer versions (3.0.2) it is deprecated and will potentially be representing a property in future versions (hence, it will not be callable).
plot(range(10), range(10), label="test label")
plot(range(10), [5 for x in range(10)], label="another test")
plt.legend().set_draggable(True)
        
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