Have snowballs actually ever been able to hit players in vanilla?

Solution 1:

No. In vanilla Minecraft on a vanilla server, snowballs and other throwables do not hit players.

It's simply occam's razor; if snowballs didn't hit the player in alpha 1.0.5, and don't hit the player in release 1.8.4 (and also all versions after release 1.4.4, as confirmed in MC-3179), and there is no indication in any changelog that the behavior changed, let alone changed twice in between those versions, it stands to reason that such a change did not occur.

There are some server plug-ins that change this behavior, though. Snowball Damage is a Bukkit plugin that does precisely what it says on the tin. Similar plugins with similar functionalities exist. This is likely where the confusion comes. Many, many servers use Bukkit (in 2012, 80% of servers were running Bukkit. More current statistics are unavailable), so many users may have been exposed to such plugins, and are remembering behavior that does not exist in vanilla.

Solution 2:

Chances are, whether a snowball will hit another player or not is entirely dependant on if PvP is enabled. Because, after all, if a snowball does indeed hurt someone and cause knockback, then you wouldn't want that affecting other players on non-PvP servers.