It shouldn't matter at all - the hashing should be done on the client so they wouldn't need to worry about server resources, and all output from a given has function is the same size. Some hash functions may have upper limits, but I doubt it. Ever md5 a multi-GB iso you downloaded from the Internet to verify its integrity? It's the same thing.
The text on the page says that, but I had no problem using a 29 character password. I was upgrading from one with 23 characters though, maybe they grandfathered me in?
