when you have that many people living in an isolationist nation, you need a caste system. otherwise, people would be crawling over each other, killing each other for economic advancement. It'll be whats happening in america and russia (population's mentality that there is a constant need for advancement and social ascent) but at a much greater scale and rate.
china is a diifferent story, different history, with a wholly different place the global economy.
as mentioned before on a different thread, dont go around trying to change other people's cultures. sure, it may be asinine to you, but taboos and accepted practices differ throughout the globe. What works for them wont work for you, and what works for you doesnt work for them. You said it yourself, we tried to make them more like us, and it will fail for them. india is one of the oldest continual civilizations in existence (maybe the oldest) and the system has remained much the same for millenia. changing it now would be too much of a risk.
again, china is a different story. they no longer have their traditional cultural values due to the cultural revolution. chinese society as it stands is going through an experimental, transitional phase that has never been seen before in history.