Sync isn't meant to be used in that way, so you need to be careful and check the Sync settings before saving the Sync setup to make sure that you aren't replacing the data on the Sync server with your current personal data.
You can click the "Manage Account" button and choose Reset Sync to select what to sync.

• Replace all data on this computer with my Sync data

Unfortunately it sounds that you've already replaced the data on the sync server with your new data, so that old data is lost.

If I'm not mistaken, Sync is meant to be used as a way to store your bookmarks and other stuff on a Firefox server, so you can access them from there. So I think that's exactly the way Sync is meant to be used.

Sorry, I'm just really frustrated that I lost all of my stuff (incl. the work related stuff) because the process of getting your Sync bookmarks and history on a newly formatted computer is not that great.

It really isn't that hard to add some kind of prompt that says "if you sync now, you will erase more than 50% of what was originally on your Sync account, are you sure?".

Sync is used to sync data between profiles.
What you did was reinstalling the OS and wanted to retrieve your data from the Sync server.
If Sync is set up in the default way that you replace data on the Sync server then you lose data.

If you still have old data in the Time Machine then you can restore that lost data from your old profile.

• https://support.mozilla.org/kb/Recovering+important+data+from+an+old+profile
• http://kb.mozillazine.org/Transferring_data_to_a_new_profile_-_Firefox