percentages are based on the parent. You are setting three divs with class .inner to height 100%. which means the total height is 300%. Set the .inner to 33% would be more reasonable.
EDIT
Just out of interest, found another article on here on SO that might help you with what you are trying to do, which is transition height 0 to transition height auto, which actually involves setting the max-height to a number really big (well at least bigger than its auto height), so only transitions to the auto anyway. Link here