Wrong: you see 10KB/s download speed because you are not throttling the incoming packets but the outgoing packets!
So, what you are really doing is rate limiting outgoing ACK packets to 1KB/s, which delays your outgoing ACKs, hence preventing the remote server from sending you data at full throttle.
You can see that with a tool like "bwm-ng" to see Rx/Tx speed, and you'll see exactly 1KB/s on Tx, and something variable on Rx.
The incoming rate will fluctuates depending on the TCP window setting used by the server which translate to how many non-acknowledged packets are allowed to be sent by the server.