The behavior you are observing is not directly related to our RadGrid control. Unfortunately it is the default behavior of ObjectDataSource, which, as the exception's message shows, cannot handle sorting on IEnumerable, but only on DataView, DataTable, and DataSet.
However RadGrid does provide option to work-around this limitation of ObjectDataSource control, which you can enable by setting MasterTableView's OverrideDataSourceControlSorting to true
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