that's all dandy until you run our of RAM, as everything is done in RAM and nothing to disk. you honestly don't see a scalability issue here? it may be ok for a few thousand concurrent downloads but anything above that will kill it. heck, you might not even get to 1k concurrents, depending on the file size..
He's streaming: Node will only buffer a few kb per connection and push it right out to the downloader. There is absolutely no need to download complete files. That's the beauty of streams and pies!