The TableCellProperty.Padding property of the "TableNormal" StyleDefinition doesn't take effect in the UI. The same is valid for the TableProperties.CellPadding property.
To work this around, you can manually set the Padding property of all TableCell elements in the RadDocument.
var cells = radDocument.EnumerateChildrenOfType<Telerik.Windows.Documents.Model.TableCell>();
foreach (var cell in cells)
{
cell.Padding = new Padding(10);
}