Terminator and Gnome-terminal use the same terminal emulation widget called Vte. However, Gnome-terminal uses a newer, Gtk+-3 based version of it, whereas Terminator relies on an older Vte, based on Gtk+-2.
Legacy mouse protocol only supports row and column values up to 223. The extended version was added to Vte's Gtk+-3 branch.
If you're a bit adventurous, you can switch to Terminator's new Gtk+-3 based version (https://code.launchpad.net/~gnome-terminator/terminator/gtk3). It's in active development nowadays, and have received many improvements and fixes over the one you're using, but there are 1 or 2 noticeable regressions right now that we're working on (most notably: wrong sizes after a double click on a separator, or after a rotate operation). But after all, I think you would like the improvements.
It requires an even newer version of Vte than shipped by Trusty. You can try if vte2.91 package from Gnome3 Staging (https://launchpad.net/~gnome3-team/+archive/gnome3-staging/+packages) for a newer Ubuntu installs fine, I'm not sure. Or you can compile and install from vte-0.42 tarball (ftp://ftp.gnome.org/pub/GNOME/sources/vte/) (./configure --prefix=/usr && make && sudo make install), I did this the other day and I can guarantee that this works, all you need to do is install some dependencies that are available as Trusty packages, although sometimes it's a bit tricky to figure out the required package (along the lines of python, gir, libgirepository...).
Installing newer Vte this way won't overwrite your previous ones, you'll have three versions coexisting.
With the newer one in place, Terminator's Gtk+-3 version from bzr should start up straight away.