The little bank and side slip is min drag. The bank means less rudder and the resulting sideways moment is being compensated for by the side ways component of lift. Any more bank, and you risk the spoilers at the low speeds. The side slip ensures the aluminium tracks in a straight line.
I would imagine the drag curve has a relativly sharp bottom due to increased form drag from the dead engine and induced from the rudder, so any change to the config is putting you towards the back of the curve ( If only slightly), so a reduction in performance and "feel".