As per the USB 2.0 specification, all self-powered hubs should provide the ability to turn off power to downstream USB devices. Does the Isolator provide this ability?

The 7054-based Hi-Speed Isolator does not work as a hub and cannot provide a function to power off slave devices.
However, it does support transmission of "suspend" mode. Suspended devices must not draw more than 2.5mA. The isolator itself cannot suspend, so always add 140mA to the overall consumption.
See also answer 1135.