Iirc the drag on your legs is ~6 watts. You don’t notice it even when spinning the wheel. Though obviously there is friction, the power has to come from somewhere.
The hub is always on, but I bought the system specifically so it’d always be doing something. Illuminating a light, charging batteries or charging/running USB devices. There are hubs that can be switched off that would work with this system, though I believe even when off thay have some extra drag.
£400 is indeed a lot of dosh, but in theory I can go away and need no external power sources for any of my kit. I didn’t come across another system that would do all of the above.