It could be due to missing dependencies. Are you sure you have installed all of the dependencies for the menuconfig? I’d also suggest you to check section 5.7.1 of the yocto development manual on how to use menuconfig http://www.yoctoproject.org/docs/1.8/dev-manual/dev-manual.html#using-menuconfig . I hope you find this helpful.
the issue was that i needed to do a full 'bitbake edison-image' before I was able to do menuconfig. So - the full sequence (after you've set up bitbake etc.):
bitbake linux-yocto -c menuconfig