I have a downloading add-on installed in Firefox.
I just tried it with this video. Trying to download the MP4 1080p version, I got an error similar to what you describe. However, I was able to download the MP4 720p version without a problem.
Trying the same thing in Chrome with another extension, I got a "server error" attempting the 1080p download and success with the 720p.
So, perhaps there is no 1080p version, but Youtube is claiming there is. Or perhaps the extension is misreading what Youtube is advertising it has.
I checked out that video and there is no 1080p listed for it. It only goes as high as 720p.