This has been an issue for sometime, with the telerik guys saying this is the expected behavior. There are some work arounds, including navigating to the final page when you click new (as that should work in your sample, if you navigate to the last page, and click Add new Record the popup should show up).
Here is a sample I've found from this question (Kendo grid Insert new record on the last page, last row position) which uses inline, but the same principal exists for popup editing.
http://jsfiddle.net/OnaBai/sAVGk/ This fiddle changes the above linked to use popup editing.
It creates a custom toolbar item for adding a new item
toolbar : [
{
name: "my-create",
text: "Add new record"
}
],
And binds the click event to navigate to the last page after doing an insert
$(".k-grid-my-create", grid.element).on("click", function (e) {
var dataSource = grid.dataSource;
var total = dataSource.data().length;
dataSource.insert(total, {});
dataSource.page(dataSource.totalPages());
grid.editRow(grid.tbody.children().last());
});