As Dobromir already explained this is a browser behavior. I researched the problem and found that it is due to the unselectable="on" attribute that we set in all toolbar buttons. You can see my test in the following video: http://screencast.com/t/RejQW11pt
We cannot remove the unselectable="on" attributes because the toolbar buttons will not function property, for example the copied content will be pasted outside of the editor or at the beginning of the content area. Multiple side effects will popup as well.
All you need to do is to scroll the image so that it does not overlay the toolbar and you will be able to use the toolbar buttons.
the Telerik team
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