The Charlie's Angels moviemaker was set to originally reboot the franchise for the first time since Christopher Reeve played the Man of Steel in the 1970s and 1980s.
Star Trek director JJ Abrams had written the script, and Scarlett Johansson was lined up to Lois Lane, while Downey, Jr. had agreed to play the superhero's nemesis Lex Luther.
However, McG exited the project after refusing to shoot the movie in Australia, where bosses at Warner Brothers studios wanted to locate the set, due to his phobia of flying.
He tells Playlist, "JJ wrote the script, and we got that to a really good place in the end. But I'm to blame for (the film not happening).
"We had Robert Downey, Jr. locked up to be Lex Luthor, which I think would have been extraordinary."
The film was eventually made by X-Men director Bryan Singer and hit screens in 2006 as Superman Returns, with Kate Bosworth as Lois Lane and Kevin Spacey as Lex Luthor.
Ironically, soon-to-be Superman Henry Cavill auditioned for the lead role, which eventually went to Brandon Routh.
Cavill will play the superhero in Man of Steel, which is due for release next year (13).