The 7805 regulator you have is a classic linear regulator where the current used by your device is the same as that of the supply coming in.
So let’s say your USB drive needs 1/2amp of current and runs a 5V, so that’s 1/2 * 5 = 2.5Watts of power. The battery is having 1/2 amp drawn from it too so the total power being used is 1/2 * 12 = 6 watts.
2.5 of those watts are being used to power the device, the other 3.5 are being used to warm up the regulator.
Phone chargers use switching regulators that rely on magic and other stuff to work, but the end result is that the battery current drawn doesn’t have to equal the current used by the device, so tend to be far more efficient.