While fishing for white bass this weekend I noticed a jug moving in various directions in the middle of the lake - not where I usually see them in coves. I paddled over to it (from a kayak) and noticed there was no name or address on the jug, just a piece of reflective tape, which I think makes it illegal - correct? There was a very large catfish on the end of the line. I left the fish on the line and went on with my fishing - should I have released it? I have to admit that this thing was big enough that I was a little concerned that it might capsize my yak if I tried to release it and the line got caught on something.

You did right. It belonged to someone. The name and address may have been attached below the jug.

you did good
and if nothing attached then yes illegal
but if you picked it up and were seen then its assumed yours and you get ticket for unmarked jug.
if still there after a month inform (try to anyway) a game warden
if they're old and unmarked i usually get rid of em. this angers some people but they should have legal setups

Only the game warden and jug owner should really be close enough to a jug to determine if its a legal jug.

friday evening i set out two jugs in the mouth of a cove i was going to be fishing in. within 15 minutes of setting the jugs a boat comes into the mouth of the cove and starts jacking with them. as soon as they actually grabbed one i yelled and they threw the jug in and moved on. If i had not just got anchor set and several lines out i would of run over there.

the jugs belong to someone and it's the game wardens job to ensure they are legal. (which mine ALWAYS are)

always legal here too and fishing in a lot of those areas it's pretty hard to stay away from some jugs and you can usually tell from looking at some of them that they are not.
i hate old jug and trot lines with a passion and our game warden at my favorite lake is not compitent to say the least. so i will usually remove some of these when they become a problem.

i would have pulled up and ran there tags so our GW could do nothing. (BTW this is the only game warden i don't like most of them are great)

You did right by leaving the jug. If it aint yours leave it alone.

I don't think you should have touched it.

I agree, don't touch! If you think it is an illegal report it to your local game warden and let them investigate.