I imagine it's simply the reverse of Knowledge: The Planes. Just as characters on the material planes must learn Knowledge: The Planes, so a planar native must use Knowledge: Physical Universe to understand the material plane. The only problem I see with this is that it becomes a Knowledge skill that can take the place of so many others.
For instance, a human mage native to Keoland on Oerth might learn Knowledge: Nature, Knowledge: Geography, Knowledge: History and Knowledge: Local just to have a decent understanding of his homeland, but he only needs to learn Knowledge: The Planes to know the same kind of information about the Elemental Plane of Fire.
So, if this mage ends up living in the Elemental Plane of Fire does he need to take Knowledge: Nature, Knowledge: Geography, etc. etc...or simply keep increasing Knowledge: Tha Planes? This same thing comes up when you have to decide if Knowledge: Dungeoneering is all a drow ranger needs to take to know everything about the caves and creatures of the underdark. Or does Knowledge: Dungeoneering become Knowledge: Surface World or something to that effect for natives of the underdark?
I would probably decide that skills like Knowledge: The Planes (or, conversely Knowledge: Physical Universe for a planar native) are general information only. You know a broad base of knowledge about the planes or a particular plane, but you wouldn't necessarily know about extremely rare flora or fauna, for example.
Basically, Knowledge: The Planes (as well as Knowledge: Dungeoneering or Knowledge: Physical Universe) are for those who would "like to visit, but wouldn't want to live there." I think of it as the difference between someone who visits New York City now and again for work and play and someone who's lived their all their lives.
Anyway, these kinds of complications might be the reason the skill was removed from the product (if indeed it was removed). It could have raised levels of complication that the writers didn't want to (or didn't have room to) deal with. Or it could have just been assumed that it works as a reverse of Knowledge: The Planes. Of course, you could just say that Knowledge: The Planes refers to all planes other than your native plane, in which case Knowledge: Physical Universe is entirely unnecessary.
Sorry for all the guesswork here. Just putting forth a possible explanation.