Or something like that. What a bizarre expression. Suppose what we know can be measured on a linear scale, with zero being "knowing nothing" and 10 being "knowing everything." Suppose what you know is an 8 on the scale. The guy who has forgotten more than that has forgotten 9 or 10 points worth, and so his knowledge is now rated at zero or one on the scale. So essentially, in this case, the other guy is calling himself ignorant.
Now if your knowledge is a 2, and his knowledge used to be 10 and he has forgotten 3, then yes he is still a 7 and knows more than you do. Note however that the expression is that he has forgotten more than you know. Surely it is better for him to have forgotten less than you know than to have forgotten more than you know! If more, it is possible that he has forgotten 9, in which case he is now a 1 and knows less than you do.
Perhaps this expression was once used humorously, but I don't think it is used that way most often any more. I think it is intended to be clever, but it just leaves me scratching my head.
Yes, I have thought about this too much now...
Update... I've thought even more while waiting for my family to wake up...
Let's say your knowledge is Y, and his used to be H but he has forgotten F, with F positive. What we want is
Y < H - F
so that what he knows now (H-F) is greater than what you know. An even stronger statement would be
Y < H - F - F
Putting one of those F's on the other side gives
Y + F < H - F
and this gives us a more reasonable witticism
"If you knew what I've forgotten, I'd still know more than you"
which might be used when one is accused of having forgotten a lot about some topic.
Geekiest post of the year!