When you configure RadHtmlChart's YAxis with NarrowRange set to true, the setting is not serialized and as a result, not applied.
You can avoid it by setting the narrowRange on the client-side:

		<telerik:RadHtmlChart runat="server" ID="RadHtmlChart1" Width="250px" Height="300px">
			<ClientEvents OnLoad="chartLoad" />
			...
		</telerik:RadHtmlChart>
		<script>
			function chartLoad(){
				var chart = $telerik.$("#RadHtmlChart1").data("kendoChart");
				chart.options.valueAxis.narrowRange = true;
			}
		</script>