It never was a "drill" - just an explanation of why you need to keep perps (and potential perps) at much better than arm's distance - which used to be the standard.
Oh, yes, it was indeed a drill. It was a drill devised by then-Sgt. Tueller when he was the training officer for his department. I have read two other articles by him and watched one video of a talk he gave, and it is very clear that it WAS a drill. But it wasn't a tactical drill. The purpose was the transfer of knowledge to the next generation of street cops. His idea going into developing it was that experienced street cops have picked up an ability to sense when there is a genuine danger, and when there isn't. What he wanted to develop was a way to teach the new kids that sense without leaving them on the street for years before they developed it. The rationale behind the drill is as described in this article, but he did use it as a drill, and he had all his street officers go through it -- at least once as the cop, and at least once as the knife-wielding perp.
Most folks talk about "The Teuller Drill" without having any idea what it is, or why. If they have some notion, it is that it must be the reason shooters who cannot draw and shoot in 1.5 seconds are considred "slow" or "sub-standard". 
Worse, people "get" out of it that anything within 21-feet is a free-fire zone, and that was NOT what the drill was intended to teach. It was meant only to teach rookie cops how easy it is to get behind the curve, and to show them when it's time to do something to remain ahead of the curve. Such as, if you have a suspect (or a "person of interest") acting hinky, you can't see his hands, and he approaches within the 21-foot danger zone ...
SHOOT THE BUM! No, seriously, the response is to do ...
something. Anything to shift the dynamic. Put your hand on your duty weapon (or taser) and unsnap the restraint. Maybe draw and hold the weapon at low ready. Or maybe back up a few steps, or step sideways a couple of paces to get the other guy off balance and decoupled from whatever he has in mind. It's not an automatic shoot situation, but a heads up to be alert, and be prepared.
Tueller has been retired for a few years now, but he still speaks at conferences. One of the interesting points he makes is that the 21-foot rule is not valid today. When he devised the drill, it was for HIS uniformed officers based on whatever retention holster they were using back then ... which was rudimentary compared to what cops wear today. Therefore (he says), that 1.5 seconds it took then to draw and get off two shots to center of mass might take 2.0 or 2.5 seconds today, so the 21-foot distance has to be increased to whatever distance the hypothetical average, knife-wielding punk can cover in 2.0 or 2.5 seconds. How far is that? I don't know, and he didn't guess. Probably at least 30 feet, more likely 35 to 40 feet.
And, lastly, he stressed that the rule was never intended to apply to anyone other than uniformed cops carrying duty weapons in duty holsters. Not detectives, certainly not us "civilians." In fact, not even uniformed cops from other departments, unless they used the same guns and holsters as Tueller's department did. Why? Because the 1.5 seconds was based on the average of how long it took HIS uniformed cops to draw and fire two shots. Someone carrying concealed in some other kind of holster might need longer to draw, engage, and fire two shots. More time = more distance. No "21-foot rule."
