We analyze fundamental limits to the second-harmonic conversion efficiency attainable from semiconductor intersubband devices employing asymmetric stepped and double quantum wells. The coupled propagation equations have been solved numerically, accounting for saturation, absorption, and optical heating. It is found that the key figure of merit is the conversion efficiency at the onset of saturation, which has a remarkably simple form depending only on the ratio of broadening time to intersubband relaxation time and on another ratio involving the optical matrix elements. We show that since there are fundamental limits to the values of these ratios, it is unlikely that conversion efficiencies exceeding /spl ap/10% can be attained in devices of the type considered in the previous literature, and for surface incidence even efficiencies approaching that value will require impractically-thick active regions. While detuning from the double resonance condition is often advantageous, net improvements to the optimum performance are relatively modest. However, these limitations ran be transcended by placing the subband system in contact with an optically-inactive momentum-space reservoir, which shunts the intersubband relaxation and delays saturation by refilling the depleted subband states with electrons from the reservoir. We propose a specific device based on /spl Gamma/-valley active states and L-valley reservoir states in InAs-GaSb-AlSb asymmetric double quantum wells, whose energy levels and optical matrix elements are modeled using an 8-band finite-element calculation. It is predicted that a conversion efficiency of 20% can be achieved in an active-layer thickness of less than 10 /spl mu/m. >