How was 256-bit WEP cracked as well? WEP is now considered as insecure. But how about the 256-bit WEP?
Could someone explain why a 256-bit encryption isn't enough?

'A 256-bit WEP system is available from some vendors. As with the other WEP-variants 24 bits of that is for the IV, leaving 232 bits for actual protection. These 232 bits are typically entered as 58 hexadecimal characters. ((58 × 4 bits =) 232 bits) + 24 IV bits = 256-bit WEP key'
Yes.  256-bit WEP is insecure.  There are a broad range of attacks against WEP.  Most of them aren't affected by the key length.  Wikipedia has references to many attacks on WEP; for more, read those references.  Don't use WEP.  Go straight to WPA2.