I have a 240 volt dryer currently, and I want to change it out for a gas dryer that will utilize 120 volt. Since the circuit is 240 volt 30 amp, I'd like to use the existing 6-8 gauge wire and pigtail it down to 12 gauge in the existing 2-gang box, and just cap the extra wire. Is this within code, or should I pull the romex and run new?
I agree with Ed Beal, this is legit because you already have a separate neutral and ground wire. You must change the breaker to 20A. The receptacle size MUST match the breaker size (there is an exception to allow 20A breakers on dual 15A sockets, i.e. the common recep we use everywhere).
While you're in there, disconnect and cap off the unused red wire.
Feel free to use either a 1-pole or 2-pole breaker; if the latter you only connect one side of it. It just depends on what breakers you have, what spaces are available in the panel etc. DO NOT leave an empty gaping hole in your service panel face that curious fingers could reach into. If you have a hole, fill it with basically any breaker that is correct for your panel (blanking plates are $3.50, flimsy and hard to find, real breakers are $4.50/space and everywhere. Your call lol).
I say buy breakers since it's a thing you'll likely use later. Thus, make sure to use correct breakers, e.g. same brand: BR in BR, HOM in HOM, etc. They're all within $1 of each other so there's no big savings. While some will cross-"fit" they don't fit properly and will arc and burn the bus stab.
Oh, one more thing. The laundry room recep, since this is "new work", must be GFCI. That can happen either as a GFCI breaker ($40) or a GFCI recep ($18).
If you are putting a GFCI recep in a 2-gang steel box, get yourself a 1-gang "mud ring" not a domed cover.