This paper presents an evaluation of the performance of time-dependent density-functional response theory (TD-DFRT) for the calculation of high-lying bound electronic excitation energies of molecules. TD-DFRT excitation energies are reported for a large number of states for each of four molecules: N-2, CO, CH2O, and C2H4. In contrast to the good results obtained for low-lying states within the time-dependent local density approximation (TDLDA), there is a marked deterioration of the results for high-lying bound states. This is manifested as a collapse of the states above the TDLDA ionization threshold, which is at -epsilon(HOMO)(LDA) (the negative of the highest occupied molecular orbital energy in the LDA). The -epsilon(HOMO)(LDA) is much lower than the true ionization potential because the LDA exchange-correlation potential has the wrong asymptotic behavior. For this reason, the excitation energies were also calculated using the asymptotically correct potential of van Leeuwen and Baerends (LB94) in the self-consistent held step. This was found to correct the collapse of the high-lying states that was observed with the LDA. Nevertheless, further improvement of the functional is desirable. For low-lying states the asymptotic behavior of the exchange-correlation potential is not critical and the LDA potential does remarkably well. We propose criteria delineating for which states the TDLDA can be expected to be used without serious impact from the incorrect asymptotic behavior of the LDA potential.