Extension name length restricted to 50 characters

Why the restriction?

Drupal did not directly restrict the maximum length of extension-names (names of themes and modules) in any way.
But they were actually restricted (with inconsistent numbers) in various database tables of core modules.
Beside that this change was also required to ensure the stability of new Drupal 8 core systems (eg. configuration object names).

Why 50 characters?

The decision to restrict names to 50 characters was made because the maximum used name length of drupal.org modules seemed to be at 43. This was increased to give it a little buffer space upwards.

50> characters is a very extreme extension length and it's unlikely that such extensions will even exist outside of drupal.org.
As an example, this is how a 51 character module name would look like: yet_another_views_slider_extension_for_the_garbage.module

Consequences

Extensions (themes and modules) won't be able to use shortnames longer than 50 characters.
There are no such long names in (contrib) modules/themes known on drupal.org, though this might be an issue for custom modules, such as features.

Upgrading existing sites

When upgrading your existing site to Drupal 8 there should be no problem as long as there are no modules with names longer than 50 characters.

If you have modules or themes with names longer than 50 characters though the upgrade will complain about a failed requirement.
There are several possible ways to work around that:

Contrib extensions:
If the affected extension is a contributed module or theme from drupal.org, please open an issue in its queue pointing to this page.
After the maintainer fixed that issue you should update your module and retry the upgrade.

Custom (/ your own) extension:
Best case scenario:
The extension is a very basic module (eg. a feature) or theme: With basic Drupal knowledge you should be able to fix this by hand.

• Disable the module / theme
• Rename the extension by renaming all its files
• Search&replace the extension files and exchange the old long extension name with the shorter one
• Re-enable your extension again
• Retry upgrading the site.

If the module was basic enough it should all be okay; otherwise you have a worst case:

Worst case scenario:
It's a complex module: You'll need a developer for this.

• Rename the extension by renaming all its files
• Search&replace the extension files and exchange the old long extension name with the shorter one
• Write a hook_update() function that moves all the modules configuration to the new name where necessary
• Run update.php to apply the changes
• Retry upgrading the site

Other documentation

The drupal.org upgrade handbook page has a small section for upgrading modules.