Q: Drag and drop from Photos? Nope.

Tell that to Apple at https://www.apple.com/feedback/photos.html, not to us.  We're just users like yourself.

The new Photos workflow is super slow and very tedious compared to the drag and drop.  It used to take just one command (drag and drop) to get a photo out of iPhoto.  Now I have to go to Photos, try to figure out which photos I want, go to PSE, choose Open, drag the small dialog box open bigger (because it always opens in the same size no matter what) so I'll actually be able to see my photos, scroll down to media, click on Photos, wait forever for it to load, find the folder/file/album I want in Photos, enlarge all of the photos so I can tell them all apart, then try to figure out which ones I want before opening them (something that can be hard trying to remember exactly which photo you wanted especially if you have a ones that are very similar). And I have to go through this each and every time I want to open a Photo in a program other than Photos.   Yes, there a way to get my photos, but it's considerably time-consuming and slow.  Please bring back drag and drop. 

go to PSE, choose Open, drag the small dialog box open bigger (because it always opens in the same size no matter what) so I'll actually be able to see my photos, scroll down to media, click on Photos, wait forever for it to load, find the folder/file/album I want in Photos, enlarge all of the photos so I can tell them all apart,

That's an issue with PSE, perhaps you should ask about that on the Adobe forums as they make that.

then try to figure out which ones I want before opening them (something that can be hard trying to remember exactly which photo you wanted especially if you have a ones that are very similar).

Or, you could use the Search Box in that dialogue...

or

Install the External Editors extension, which makes all of that unnecessary

https://itunes.apple.com/ie/app/external-editors-for-photos/id1074021862?mt=12

Terence mentioned the best solution to your problem, i.e. purchase  the 99¢ External Editors For Photos from the App Store and use PSE from right inside your library.  This user tip shows how: External Editors in Photos Are Here

Although I'm not fond of the white background in most of Photos' windows I find it to be very powerful once you learn how to use it. It's just a slightly different paradigm than iPhoto.

Does anyone know if Apple are doing anything about this? It has been over 12 months and there is no sign of drag and drop from Photos returning. I can't tell whether this is ignorance, incompetence or a massive oversight on Apples part!

Of course not - Apple does not pre announce things

But as an "AppleFanBoy" you certainly are aware of this and of course Drag and drop works perfectly to Apple applications and third party applications who that have been updates to the current standards - again as an "AppleFanBoy" I'm sure you are totally aware that Apple can not make Microsoft, Adobe or anyone else update to Apples current OS standards

LN

Does anyone know if Apple are doing anything about this? It has been over 12 months and there is no sign of drag and drop from Photos returning.

You can drag and drop from Photos to all applications that have been updated for full compatibility to El Capitan and with Photos.

• I can drag from Photos directly into a new Mail message window.
• I can drag and drop from Photos into Word documents (Word 15.15) or any other Office applications from Office 2016
• I can drag and drop from Photos into the new versions of iWorks - Pages, Keynote, Numbers,
• I can not drag and drop into older application, and not yet into the newest Notes.app. But at least I can copy and paste photos into a new note.

I doubt, that Apple will add legacy code for compatibility with older applications to Photos. It is up to the developers of the third-party applications to release updates.

This is untrue, I can not drag and drop from Photos to Pages, to Keynote, to the photo box in Contacts, or to any number of other Apple applications.  Adding steps for the user is antithetical to the Apple design philosophy we've been conditioned to accept.

Works here. Perhaps you need to be up-to-date.

You don't drag and drop from the Photos library into a Pages for other Apple app document.  You use the Media Browser:

It's the same with Keynote:

For Contacts if the photo you want to use has a has a face associated with it it can be accessed via the Contacts application:

So it's not difficult to get photos from Photos Library into other Apple apps or 3rd party apps that have been updated to be compatible with El Capitan.

As Terence mentioned if you're up to date with the System and the Apple apps you can access those photos.

This is untrue, I can not drag and drop from Photos to Pages, to Keynote, to the photo box in Contacts, or to any number of other Apple applications

I'm doing it all the time - dragging directly from Photos to Pages 5.6.2 or Keynote 6.6.2.

For Contacts use the Media Browser as described by OT. Contccts wants to use the recognized Faces in Photos.