no,you assumed correctly. this is intended for s-on,2.3.4 phones to root and downgrade back to "s-offable" firmware.
again,there are only 2 reasons a PB31IMG is not found on the root of the sd card:
1)not named correctly. the phone muse see "PB31IMG.zip". due to the way windows sutomatically adds and hides file extensions,it is usually correct to name the file "PB31IMG" with windows. common errors are for the file to be names "PB31IMG" or "PB31IMG.zip.zip". check your file with a file manager on your phone and see how its seeing it.
2)sd card not formatted FAT32. if it is plain FAT or anything else,PB31IMG is invisible. on rare occasion,i have seen claims that a bad sd card,or card that needs reformatted(even tho it may be FAT32) will have the same affect.
several folks have used the downgrade method successfully,no reason it wont work for you
just need to figure out wich of the 2 things above is keeping PB31IMG from flashing.