If they are blowing us away on the physics GRE its more likely that a copywrite infringement took place than anything else.
One just has to look at the typical undergraduate Physics curriculum in India/China to understand why they do so much better on the PGRE. I do not think it is copyright infringement or such sort of 'conspiracy' theories:
At a reputed Indian University for instance (IIT), a typical BSc Physics curriculum consists of a whopping 150
credits in Physics and related topics in Engineering. The same goes on in China with general courses making up just about 20-30
If you look at our curriculum, its more of the opposite which is why in terms of 'liberal arts' skills none can possibly compete with us.
Also, considering the fact that students in India/China specialize in their field of choice in high school itself we cannot compete in terms of 'hard' Physics knowledge.
On the flip side, one just has to look at the list of Nobel laureates + scientific achievement (let's say based on factors such as published research), to see which system of education is better. Clearly, US is ahead of the game in the sense that a conceptual approach to education is emphasized here as opposed to just 'mastering' a list of theorems/equations.
The only problem US will face in the long run is the number of students who will decide to pursue a career in science. In 'poor' countries like India/China, subjects such as Arts&Humanities are not really looked upon as a reputed area of study. In essence, the the subject of passion in terms of pursuing a career is just coming into the social imagination as opposed to a comfortable job/career (+money).