Possible workaround:

    Resize window with Alt+F8. Move cursor horizontally to the next
monitor and click to resize.

I've seen this issue on x86 Karmic desktop machine using GDM window
manager with dual head monitors in portrait TwinView mode. Trying to
select Window (circle icon in upper left corner) ->Resize does not work,
but Alt+F8 seems to work.

 
Package: gdm
Status: install ok installed
Priority: optional
Section: gnome
Installed-Size: 7280
Maintainer: Sebastien Bacher <seb...@ubuntu.com>
Architecture: i386
Version: 2.28.1-0ubuntu2.2
Replaces: fast-user-switch-applet, gdm-snapshot
Provides: x-display-manager

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can't resize gnome terminal to larger than monitor width
https://bugs.launchpad.net/bugs/562622
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