I'll vote legit device. How is it any different from holding a piece of metal on the table of your drill press?
I can see that it looks a little hairy since it's at right angles from the usual orientation, but that's an old technique. It might seem weird now, but it wasn't uncommon for a lathe to be someone's first piece of equipment, especially in a hobby shop, so having it do the work of a drill press as well was quite valuable. It hasn't always been possible to buy a drill press with your left over lunch money.
I think the value of a drill pad comes from a time when drill presses were less common.
I've done the dicey looking thing where you center drill with the drill in the head stock and the other end of the bar on a center in the tailstock. (...and your hand on the work to keep it from spinning.) It works great. It's a good way to ensure your center holes are lined up on a rough casting or other irregular work piece. I've clamped stuff to the lathe carriage for boring and I've used an angle block on the carriage to hold so I could drill large holes with back-gears and power-feed.
I wouldn't use the a drill pad or crotch if I had a drill press available, but that is mostly a matter of convenience. (I think the one in your illustration is a crotch, while a drill pad is just flat.) My drill press is always set up with a drill chuck and a table, while the lathe is under a tarp and would need to have tooling swapped out to do that work.
On the other hand, I've never figured out how you're supposed to drill through-holes with that stuff without poking holes in them. I can think of a few ways, but they seem impractical and time consuming. Once again, it only looks like a useful tool if you don't have a drill press.