The old one let you run your own server. It let you encrypt it with your own key, which you could know was generated from a good entropy source, not been shared, and is store securely. As it is, it's possible the new sync has a backdoor, even one many people at Mozilla don't know. There is also no point in deliberately increasing the attack surface for no reason.
>You are confusing key lengths from algorithms like RSA with symmetric algorithms. The keys that are used for encrypting data will be either 128 or 256 bits (haven't checked) and used with some symmetric cipher.
I may be wrong, but I thought the old sync used an RSA key as it's used for authenticating the user as well as actually saving/accessing the data (probably symmetric for the actual storage, with the key encrypted using the RSA key).