This is an intended behavior. To use the MATLAB Editor, you must run MATLAB with a display. You can do this by setting your DISPLAY environment variable or by starting MATLAB without the -nodisplay option.
Here are some instructions on how this could be done:
1) Start MATLAB from the Terminal Window in -nodisplay mode.
% matlab -nodisplay
2) Once MATLAB starts in the terminal use the SETENV and GETENV function to explore/change the environment variables.
3) To get the current variable value:
>> getenv EDITOR
4) To change it use the following:
>> setenv('EDITOR','emacs');
>> edit % this should launch the Emacs editor.
