That approach works well enough for what I needed. Note, I had to add a ticks value to the setTimeout to get it to work, forcing it later that the blur event that calls closeCell.
A few downsides, obviously. Not generic to the type of incell editor, requires duplicating the progress bar initialization code (or moving it to a common function), and is wasteful when the cell edited wasn't actually the progress bar cell. If one has enough of these widgets in different columns, the edit event callback can get a bit messy also (btw, it would be cool if the edit event would pass the field being edited as a parameter when incell editing).
I would definitely like to see Kendo UI address this in a more generic way, such as with an event on closeCell. I guess I can just override the closeCell function myself.