When I create a polygon it will only allow me to drag out a very small one but no larger. Single clicking to create the polygon will let me create it at any size I specify. I can also change the size after the small polygon is produced by free transforming or specifying the size in the options bar. I do not have round corners or star selected although doing so changes nothing as does changing the number of sides. The other modes of the shape tool do not have this problem.
How do I regain the ability to click and drag to create and size a polygon?
I believe you have the Radius set to some number, thus restricting the size of the shape. Delete the number listed by "Radius" and you should regain this ability to change shape size...