You can workaround this issue by resetting the content area's height only for IE:

<telerik:RadEditor runat="server" ID="RadEditor1" OnClientLoad="OnClientLoad">
</telerik:RadEditor>

<script>
    function OnClientLoad(editor, args) {
        if ($telerik.isIE) editor.get_contentArea().style.height = "auto";
    }
</script>