*Ships have gotten WAY bigger*
Ships are built with the Panama Canal in mind. Think those USS Iowa class battleships-108’ wide.
Next. As for giving it away it was a good idea. Stole it fair and square? Perhaps. We did what the French couldn’t do. Then we tried to prove it again in Viet Nam.
Last. An addendum gives us the right to take over the canal militarily if a civil action takes place in the country that affects it’s operation.
Even if they fit horizontally there’s still the displacement. Bigger ships need more water to float them, this has to be available and takes time. One way or the other there’s a maximum capacity that canal can handle.
Another limit was that the ships had to be low enough to clear the Brooklyn bridge. Even if they weren’t built there, they still could be later sent there for repairs.