Kentico 8 uses jQuery 1.7.2 because it meets all our requirements and there was no compelling reason to upgrade it. There are major breaking changes in jQuery 1.9 and we did not want to force our customers to update their client code.
However, you are free to use any version you like, as long as you do not use any Kentico components that require jQuery. Just add a reference to the relevant version. The current version used by Kentico must be preserved because the administration depends on it.
I suppose it won't cause you any troubles as your reference to Kendo UI suggests that you are building a client application. In case I'm wrong and you need to use both Kentico components and jQuery higher than 1.7.2, there is still a possibility of using jQuery's no conflict mode, but I wouldn't recommend it. Could you please be more specific and state what exactly prevents you from using the latest version of Kendo UI? You might also share your idea at http://ideas.kentico.com. With reasonable arguments and enough support from other customers it might turn into a new feature.