This article is from the Model Rockets FAQ, by Wolfram von Kiparski with numerous contributions by others.
From Jack Hagerty:
...There was a great debate a few years back as to the amount of
parasitic aero drag that comes from a launch lug (hence tower
launchers, pop-off lugs, etc.). The lug essentially stagnates and
looks like a solid piece only with turbulence inside. A friend of mine
who's an aero engineer with NASA at Dryden told me that if you can
keep the length/diameter ratio short, then the air will pass through
with very little drag. "How short?" I asked. "About 1/4," he
said. That means in order to have no drag, the lug length has to be
less than 1/4 of the diameter. For a 1/8" rod this means a length of
no more than 1/32". This is, of course, impossible using a
conventional fiber lug, but 1/32" is .031"...