It does. It currently doesn't work that well, for example the TinyPic method is currently broken without an account (at least for me) and I don't have time to keep up with changes to the sites' APIs. While it isn't compatible with all site and browser combinations, DragFrom solves the same problem.
It being moved into the legacy pack wouldn't guarantee it's abandoned forever, just reflect the state it's currently in and mean that people just wanting to install some plugins don't download something that doesn't work.