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It also doesn't work for me with large directory/file structures. I've tried to download "app" folder from Magento ecommerce application, which is quite big (more than 100 folders in it). When tapping Download button Textastic starts to enumerate files and folders and displaying it, the counter goes to about 100 folders and few files and then it crashes. I've also tried to download only a subdirectory of this folder, which also crashed the app :(.
This would be a killer feature of Textastic! Please consider adding it!