Is it legal for a NCO to require you to surrender your military ID while taking a drug test (random at the unit) ?

Yes. Order from the local commander being executed by appointed NCOs executing their delegated tasks. AR600-20 authority covers this para 2-8 and CH4. The ID card in the box method is part of the installation and unit SOP for conducting urinalysis. It has a lawful purpose and does not violate your rights, for them to hold government property (the ID Card) until they get your whiz quiz submission. Your appointed place of duty is the whiz quiz location until released (so you have no other place where you need to be with the ID). The regulation covering the test program demands that all those randomly (or 100%) selected and present for duty must report and submit to the test. The ID Card is part of that process and verification. Common sense wise, the UA can hold it up and match your brain housing group to the picture before slapping the PIA label on the sample.

Here is the section from the standardized template for the unit urinalysis SOP from ASAP:
8. The UPL will remove a new specimen bottle from the box in front of the Soldier and replace it with the Soldier‘s Military ID card. The UPL will then affix the label to the specimen bottle, in full view of both the Soldier and the observer, and hand it to the Soldier. The UPL will remind the observer not to take possession of the specimen bottle and to constantly maintain direct eye contact with the bottle until the UPL places it in the collection box.

It is common practice to place all ID cards in a stack with the UPL for them to prepare the inventory document in advance of the test subject at the table to be escorted with bottle overhead to the sample collection area.

I am curious as to why it would matter. The ID card is not your property. It is issued to you and you turned it back in when you left, right?
By turning over your ID for a urinalysis you were doing 2 things;
1. Establishing positive identity.
2. Establishing a control point where your bottle would be exchanged for your ID to ensure traceability of your sample.

And yes, I was the damn pecker checker myself on many occasions. I've seen more Marine units than a Navy wife.

AR 600-8-14 (IDENTIFICATION CARDS FOR MEMBERS OF THE UNIFORMED SERVICES, THEIR ELIGIBLE FAMILY MEMBERS, AND OTHER ELIGIBLE PERSONNEL), paragraph 1.19.2

"Surrender the card when a military or civilian authority requires it for ID...."

The paragraph continues, but that's the key take-away. Urinalysis testing requires verification of photo ID, and they are authorized to request it as part of their ID process. Given the legality of eligible forms of ID (State Issued driver's license, passport, INS Form or "Green Card", etc) they don't necessarily "have" to take the CAC as a form of ID, but they can and there is no issue as long as they give it back.

It all depends on how technical you want to get with it.