When the RadGrid is rendered, the RadGrid_GridData section has a seemingly excess 300px height:
<div id="ctl00_ContentPlaceHolder2_RadGrid1_GridData" class="rgDataDiv"
style="position:relative;overflow:auto;width:100%;height:300px;">
An example of this can be seen in the Telerik webmail demo at http://demos.telerik.com/webmail/.
This excess item limits changes that might be made post-rendering, so it would best be removed if it isn't adding anything to the result.