It says in the ckeditor documentation:
Sets the behavior for the ENTER key. It also dictates other behaviour rules in the editor, like whether the <br> element is to be used as a paragraph separator when indenting text. The allowed values are the following constants, and their relative behavior:
* CKEDITOR.ENTER_P (1): new <p> paragraphs are created;
* CKEDITOR.ENTER_BR (2): lines are broken with <br> elements;
* CKEDITOR.ENTER_DIV (3): new <div> blocks are created.
Note: It's recommended to use the CKEDITOR.ENTER_P value because of its semantic value and correctness. The editor is optimized for this value.
They would probably recommend leaving the p tags and adding a style definition to remove the margins and padding, so if the p tag was inside an element with the class emailbody:
.emailbody p{margin-top: 0; padding-top: 0;}