CUDA runs threads in groups called warps. On all CUDA architectures that have been implemented so far (up to compute capability 3.5), the size of a warp is 32 threads. Only threads in different warps can truly be at different locations in the code. Within a warp, threads are always in the same location. Any threads that should not be executing the code in a given location are disabled as that code is executed. The disabled threads are then just taking up room in the warp and cause their corresponding processing cycles to be lost.
In your algorithm, you get warp divergence because the exit condition in the inner loop is not satisfied at the same time for all the threads in the warp. The GPU must keep executing the inner loop until the exit condition is satisfied for ALL the threads in the warp. As more threads in a warp reach their exit condition, they are disabled by the machine and represent lost processing cycles.
In some situations, the lost processing cycles may not impact performance, because disabled threads do not issue memory requests. This is the case if your algorithm is memory bound and the memory that would have been required by the disabled thread was not included in the read done by one of the other threads in the warp. In your case, though, the data is arranged in such a way that accesses are coalesced (which is a good thing), so you do end up losing performance in the disabled threads.
Your algorithm is very simple and, as it stands, the algorithm does not fit that well on the GPU. However, I think the same calculation can be dramatically sped up on both the CPU and GPU with a different algorithm that uses an approach more like that used in parallel reductions. I have not considered how that might be done in a concrete way though.
A simple thing to try, for a potentially dramatic increase in speed on the CPU, would be to alter your algorithm in such a way that the inner loop iterates forwards instead of backwards. This is because CPUs do cache prefetches. These only work when you iterate forwards through your data.