word choice - When to use "we" and "us" — specific SAT example

I am confused about the usage of the words 'we' and 'us'. I am using a Princeton Review 11 SAT tests 2011 edition, practice test 7, section 6, number 29 (just in case anyone actually had that book).

This question was a "find the incorrect word or phrase in the following section" question. For those of you who don't know, this kind of question gives you a sentence. Four different phrases or words are underlined in that sentence and labeled A, B, C, and D respectively. The objective is to find the phrase that is incorrectly used. The particular question I need help with says:

As finalists, Mark and I were both shocked by the decision; it seemed to us that the winner of the contest was far less talented than we.

A: both shocked
B: it seemed
C: far less
D: we
E: No error

So of course, everything seemed right till I got to that last word. My thinking was to use 'us' instead of 'we'. However, the answer in the back of the book says the answer is:

E. There is no error in the sentence as written. The we in (D) may sound strange, but the subject pronoun is correct here.

Can someone please explain this to me? Why am I wrong in saying that the word us should have been used instead?

Answer

This is one of those messy situations the exam writers should know better than to dump you into.

Very rigorous judges have long held that constructions of the type "X is better than Y" (substitute your own comparative for 'better') should be parsed as elliptical reductions of "X is better than Y is", and therefore require Y to be realized in the nominative case, if that's distinct from the objective (which is only the case with the pronouns "I", "he", "she", "we" and "they". That's the "rule" which the exam requires you to follow.

Unhappily for those rigorous judges, the "rule" is not, and never has been, followed in the language-as-she-is-actually-spoken. In ordinary speech virtually everybody has virtually always said "She's better than me", "He's better than her, "I'm better than him", "We're better than them", and "They're better than us". That's the "rule" recognized by most descriptive linguists; and many people who offer advice on how to say stuff promote that rule.

So there's a fundamental disagreement between two schools of prescriptive grammarians: which "rule" should you follow?

This will probably sort itself out on the "me/him/her/us/them" side by the time you retire. But right now you're stuck in the middle.

The "I/he/she/we/they" rule is a bad one. But you're applying for admission to a discourse community which very largely observes it; so choke down your annoyance and follow their rules until you have enough seniority to follow your own rules.

Just wait for them to die and you'll be fine.