The expansion of the rope is over its entire length. When the ant is halfway across the rope, an expansion of 1 km only adds 0.5 km to the length the ant must traverse. So the farther the ant walks, the less the expansion matters, and eventually it won't even add the 1 cm the ant is moving per second.
At least that's as best I understand it.
Here's a Google spreadsheet that shows the process with a significantly faster ant:
https://docs.google.com/spreadsheet/ccc?key=0AsmKPGVX0X-0dFF...
No guarantee of being free of off-by-one type of errors, but it should give the general idea.