Nicol was speaking after Downing's superb performance in victory over Fulham.
"Sometimes some players are just not capable of playing at the top level," he told talkSPORT. "As much as I've given him praise over the last couple of weeks, maybe he's not up to it.
"Brendan Rodgers was one minute saying he's going to move on, the next thing is that he wants him to stay. Stewart has to step up and play consistently until the end of the season, if he does that then we'll see."