While reading about ps2pdf (which is just a commandline front-end to ghostscript), I realized that despite its simple appearance, ps2pdf has almost all capabilities of Acrobat 5. ps2pdf14 outputs Acrobat 5-compatible files. According to the documentation strong password protection should be possible, however, I never managed with that.
In theory the following commands should work:
-sOwnerPassword= and -sUserPassword=
In order to set the key length to 128 you have to use
ps2pdf14 -dEncryptionR=3 -dKeylength=128