Hi Brett,
Thanks for sharing your experience with us.
Your absolutely right in your observation. Indeed, Apply Css Class tool is not enabled by default in the ~/Sitefinity/Admin/ControlTemplates/EditorToolsFile.xml but I thought you were referring to it here:
"I'm trying to add my styles into the drop down list of the editor".
The FormatBlock tool (Paragraph Style dropdown) is responsible for setting the block elements only; for the other elements, you need the ApplyClass tool.
Greetings,
Rebecca
the Telerik team