We’re replacing Firefox Sync with something different… and not only did we publish the technical documentation of how the crypto works, but it contains a careful and clear analysis of the security improvements and weaknesses compared with the old one. We don’t just tell you “Trust us, it’s better, it’s the new shiny.”
The bottom line is in order get easier account recovery and device addition, and to allow the system to work on slower devices, e.g. Firefox OS phones, your security has become dependent on the strength of your chosen Sync password when it was not before. (Before, Sync didn’t even have passwords.) This post is not about whether that’s the right trade-off or not – I just want to say that it’s awesome that we are open and up front about it.