Many of us that choose to fish with live bait would rather not deal with the bulk, complexity and expense of an onboard bait tank. The gool ol' Plano bucket works but yes, it offers a lot of drag if left in the water while paddling. Kayak fishermen are among the most creative in coming up with effective, low cost solutions to our needs. (Witness Apalach, Capt. Dick, Punchenello and others)
A new, very low cost and effective solution to keeping live bait lively while fishing from our preferred craft seems to have surfaced in these parts recently. Costs I've seen posted run about $7.00 to build. Here's a link with description and photos.