Yep, in fact, it would work better on a non-system drive. I think, also, we need to make a distinction between "defragmenting" and "optimizing."
Copying files off of a drive and then back onto the drive all at once defragments a drive. All files will be written in contiguous blocks, eliminating file fragmentation.
Optimizing, on the other hand, is a fancy term for where the files are placed on the disk. With Norton Utilities and other disk optimizing programs, system files were placed at the beginning of the disk and documents and data files were placed at the end, leaving your empty space in a big chunk in the middle. While this also had the effect of defragmenting the drive, it went a step further and actually defined where the files were stored on the disk. With the old Classic Norton Utilities, you could select different profiles from a menu, say, one for your boot drive and a different profile for your data drive depending on what kind of use you wanted them optimized for.
But yes, in short, copying files off of a data drive, formatting the drive, then copying them back will have similar results to what disk defragmentation utilities do.