If you share a folder publicly or with an individual, they cannot download it all in its entirety either. The files have to be downloaded one-by-one. Makes it very toy-like for business usage & sharing large collections of documents/files.
You can add shared folders (as in folders other people shared with you) to your Drive through this page: https://drive.google.com/#shared-with-me (or click on Shared with me on the Drive site). Click on the folder and then on "Add to My Drive". It will even get synced to your local disk. You can also download the whole folder (right-click).
Spent a long time looking for this, they should really work on the UI for this feature.
I was referring to publicly shared folders w/ non-Google users. If you don't have a Google/Drive account and someone shares a link-accessible folder, it can be viewed and items downloaded piecemeal, but there is no option to download the entire folder.
Link-accessible Box.net folders don't have this constraint. You can share a folder link w/ someone who doesn't have an account and they can download the entire folder w/o creating one. Google only let's you view the contents and download one-at-a-time. Your work-around is good to know, but you'd have to be sharing with another Drive user for it to work.
