Is this a cartridge that is inherently suited to perform better (velocity) with much longer barrels given todays powders? Espcially 26 and longer length. Or is this length into the diminishing returns range.

I will not comment on if the 45-70 inherently performs better in longer barrels. I will relate my experience shooting the 45-70 in my 22" barreled Marlin 1895 and my 32" barreled W&H 1871 Buffalo Classic.

45-70 Gov't
300 grain Hornady hollow point seated to 2.55" and crimped with a Lee Factory Crimp Die
Winchester brass, 2.1" trim
CCI 200 primers
55 grains of H4198

2180 fps in the 22" Marlin 1895
2375 fps in the 32" W&H 1871 Buffalo Classic

So with this 28,000 CUP load one can expect about a 20 fps increase with each additional inch of barrel.