When a layer contains only one shape or group, you can't drag that object out of the layer. That's because Illustrator iPad selects the entire layer when you select a single object in that layer.

Workaround: draw a second shape in that layer, drag out the initial shape, then deleted the original layer.

The same problem occurs when you want to drag all of the objects out of a layer: when you select them, Illustrator automatically selects the layers as well, so you can't drag the objects to move them to another layer.