There might be something interesting with the watermarks. They should only be visible to guests so if they uploaded an image it would be flagged and relatively unusable elsewhere. The watermark would be disabled for members.
I don't think it's unreasonable to have a permission to control who gets to see the download button, I could even see a user permission in their own albums: "Allow downloads of your media."
No it does not prevent downloads, but having it enabled means "Yes, you can take this image." If it is not there they take it on their own but that does not mean you give permission, which the icon basically does.