Because you need to restrict the altitude you won't currently be able to do it. As matt said, the painter shader needs something to paint on. Currently it's painting somewhere about 70000 miles in space. I have come up with a theoretical application but it would require a way to invert the surface of an object like a sphere. Perhaps that's something that Matt or Jo could implement as a plugin. I'm a pretty handy programmer so I could do the bug testing for it. This is a pain in the arse method but it would work.
you'd need to create an object like a sphere, I wouldn't recommend a planet because it creates big displacements, and centre it on the core of your planet. Copy the radius of your planet and increase it slightly until it is around the same height as your planet. You wouldn't want your clouds to be visible at this time because you'll want to paint right in front of them. so adjust it until they disappear, which I've found isn't too tricky. Then disable the atmosphere, paint your mask, replace the atmosphere and turn the sphere off. Essentially you'd just be giving the brush a canvas. It could have loads of applications for water too.
EDIT: I just thought of using a plane. If you can get one or more planes to cover the area you want to mask then you can paint on that. It'd be a helluva job getting them in position though. Alternatively you could create a sphere in 3ds Max, maya, blender etc. with the surface on the inside. Does the same thing as the inverted surface idea I was talking about before.