Actually it's a single word: "downright", as in "directly downwards". I suppose the idea is that "it" is going directly down and nowhere else. It means "thoroughly", but you use it negatively, eg. downright shameful, downright wrong, downright awful. Apparently this expression is about 900 years old (Old English: "dunrihte", downwards).

when it is incorrect :P

It's completely wrong / 100% wrong. There is no justifying it. "down right" is very informal.