The Sync Key (aka Recovery Key) is used to encrypt data for upload, Sync server storage, and download - whenever that data was off of the users devices. As of Firefox 29 it is no longer a user facing feature; IOW, not necessary for the user to deal with.

Firefox 29 and later have a new Sync version that use a Firefox account and only use the name and password and no longer use a separate Sync (recovery) key (the Sync key is automatically derived from the password of the Firefox account).

• https://support.mozilla.org/kb/how-to-update-to-the-new-firefox-sync
• https://wiki.mozilla.org/Identity/Firefox-Accounts