What workout setting did you use? I tried that tonight on my Venu and had some weird run/walk setting on there (and two others) that was not there before when I first got my Venu. I had to use the Walk Indoor setting for my workout.
The first time you use the treadmill activity for 1.5 KM or 1 mile, it will ask you to calibrate your watch to the treadmill distance and then the watch should have a reasonable idea about stride length.
After the first time, you can press the 3 dots in the red section of the display and it will give you an option to calibrate again. In my experience though, I find that changing shoes, pace, or the incline tends to throw the calibration off. It's still a pretty good estimate.