I think the style of 'drag' the P O' G represented was comedy or old style variety acting. It was popular in some pubs and WMC and the character would dress glamorously, tell jokes, rib the audience and sometimes sing.
There may have been some association with the gay scene, but men dressed as women and women dressed as men (or more commonly boys), were popular acts in the old music halls at a time when being overtly gay was not only taboo, but also illegal. The acts were 'mainstream' but possibly in a bawdy and not really child-friendly way.
Additionally, the 'bitchy', but funny 'camp' characters, with scripts seeped in innuendo were popularised by Julian and Sandy in the radio series 'Round the Horne' which had its heyday just as homosexuality became legal (around 1967). The show also popularised Polari, a secret language or 'cant' associated with gay men, fairground workers and the theatre.
Ru Paul's Drag Race also contains some words from Polari and has its own slang or argot. Yet, in my opinion, one of the differences between the type of drag act presented on the Drag Race and the drag acts of old, is that it has difficulty finding its place in society.
That is to say, Lily Savage and Julian and Sandy were characters that emerged as gay rights were being openly discussed. The characters , began to fade as sexuality began to be understood and accepted, and as a move away from the 'camp' stereotypes of gay men and 'bitchy' stereotypes of gay men, and women began.
Now, the drag queens seem to be creative masterpieces, perfect for a heavily visual world, but the overt sexualisation seems out of place in a society that already accepts, and the bitchiness seems to be a step back to old stereotypes of gay men/straight women, and without the humour that once accompanied it, it seems to be a very negative stereotype.
I am not anti-drag. I appreciate the genre and its history, but in my opinion, in general it has lost its way, and moved away from the humour that once defined it.