Downloads are hardly a minor feature. Having a downloadable package makes it significantly easier for users to try open source software. The average user is very unlikely to want to compile from source.
> Google Code (and GitHub) aren't for average users. They're developer tools.
Google Code has a number of features -- not just downloads, but also wiki, etc. -- that, while not intended to replace a user-centric site separate from the developer site Google Code is intended to provide, in practice facilitate projects using it that way.
> Downloads are hardly a minor feature. Having a downloadable package makes it significantly easier for users to try open source software.
While it has a set of features which may have made it usable for this use, I don't think Google Code was ever really intended to provide user facing web sites for open source projects, it was designed to provide developer facing project sites.
