Hi Joseph:
As far as I know, there is no config setting. That one is for "text & links" as stated, not for files.
I have eliminated drag and drop to course page by customizing course/dndupload.js (making function upload_file return false inmediatly), but thsi hack affects only course pages, NOT filemanager instances, those with your loved blue arrow.
I do have a dual feeling about dnd, having dreaming and expecting it as a teacher, I realize is a nightmare for IT staff. Easy file loading can only worsen problema with storage and backup/restore.
At my university, ULPGC, we have eliminated dnd to course pages to avoid the loading of GiBs of files. We keep for the moment dnd to filemanager areas but we are considering the topic in the light of 2.3 promise of file references. As organization what we desire is a separate fileserver for teachers and and easy, really easy, way for teachers to make references (either html links, symlinks or whatever tecnically), and ONLY references in filemanager areas within moodle.
So, some site-wide config settings to control dnd and use of filemanager/filepicker/repositories to copy files o to make references would we welcome.