that the light is drawing current (and making the wheel draggy) is a pretty good sign that you don't have bad contacts or anything. FWIW I have seen other B&M lights fail in this exact way, i.e. the wheel gets draggy depending on whether the switch is 'on' or 'off'. I keep thinking that I ought to be able to see which parts of the assembly get hot, and maybe I can track down the fault that way, but so far no luck.
Since I can buy a cheap dynamo light (that works well enough for commuting) for about ten quid, that is what I tend to use these days. I have a gut instinct that 'more features' = 'more to go wrong' too.
cheers