Is my Macbook too old to edit videos?
Your MacBook isn't the weak link in the chain, it's your external hard disk. The 2011 machines don't support USB 3.0 so you're either using Firewire 800 or USB 2.0 - the fastest throughput you're going to see on FW800 is around 95MB/s for RAID 0 HDDs and SSD devices.

More RAM will help with overall speed, 16GB is supported, but fitting an SSD and using it to store the video files you're working on will give you a much more responsive system. I don't do video but I regularly work with 500MB+ still images and working from an SSD is a breeze, archived images stored on a couple of LaCie 2Big Quadras take an eternity to load in comparison (over FW800, USB 2.0 really is painfully slow).

As for your OS, I still have a lot of love for 10.6. It may not feature the latest, greatest technologies but it is lean, solid and fast. I've tried 10.8, 10.9 and 10.10 on my photo machine and not found any performance improvements/benefits over 10.6, certainly nothing to offset the compatibility with older software offered by the Rosetta functionality. I'd advise you upgrade when the applications you rely on require you to do so, upgrading isn't otherwise going to offer any significant improvements for your current setup and workflow.

*Forgot to mention using storage attached to the Thunderbolt port - this is pretty much the only way of leveraging the full available speed of an external RAID 0 HDD or SSD. It's an expensive route, depending on budget, but it may suit your purposes. I'd still consider the internal SSD idea though, seeing 15 second boot times and applications opening in one or two bounces makes you realise how much of a bottleneck an HDD is...