You are comparing Asian 8th grade scores to the Asian-American 4th grade score. If you compare 8th graders to 8th graders (Asian-Americans scored 549[1]), you'll find that Asian-Americans came in a distant last place among all ethnic East Asians.

Still, somewhat ironically, you are both right. Underperforming ethnic groups in the US bring the average down, and the US educational Prime Directive of making sure the high-performing groups don't get ahead brings it down even farther. While Asian schools work hard to push Asian kids ahead, US schools refuse to do so, because that would just widen "the achievement gap" they're trying so hard to close. So US schools, first in spending, are last in effectiveness for ethnic Asian kids. That "doing the least with most" is school underperformance. The only reason Asian-American kids do as well as they do is that, like their cousins in Asia, they get a lot of their education outside of school.

[1] 2007 TIMSS results: http://nces.ed.gov/pubs2009/2009001_suptables.pdf Asian scores are on p. 3, Asian-American scores on p. 15