This is an insult. The pejorative refers to an extremely stupid person who, while not actually having Down's Syndrome, has an intelligence equated to that of someone who suffers from that genetic ailment. It is usually used to attack someone who has made a grave error in speech or action, or holds beliefs or takes actions not to the insulter's liking.
Many would object to this term because of its implicit devaluing of persons with Down's Syndrome.
Goddamn it, you spilled hot coffee on my crotch, you fucking downsball!
Eddie likes Chevrolets and has been buying them for years. He's such a downsball in his taste in cars.