I don't believe they are set up for failure. 1st, possibly the position they want requires more than "production" worker, or they wouldn't want to know what you know about physics, etc. knowledge. Next, the job market is difficult right now, we can all agree on that, and they are using this as a selection method (thinning process if you want to call it that).
I am sure you are a good worker, and could do the job you think is at hand(without knowing what the job is). But, maybe it requires more than you think (or they think that it does).
You have not mentioned the pay scale, if it is higher than medicore then the duties and aptitutde probably are also.
Technology and economics have uped the ante on good paying jobs
The questions require a good foundation of physics, and also just as important, an understanding what the question is asking, which is not apparent at first on some of them. I too, wanted to call some of them trick questions, but it also an anaylzing test (as in not just a knowledge test, but how you apply that knowledge)
Example: The question about the helicopter lifting faster off from the moon, is not the fact that the one with the bigger blades ordinarily has more lift, but rather, that there is no significant air pressure on the moon. What makes a helicopter or plane fly is the difference in air pressure above and below the wing or blades. i.e. The question is which heli has more lift(faster), BUT the real question is "can a helicopter lift off from the moon". Therefore, the correct answer is C; neither, either or the same.