"... LEDs (128 of them), ... 4094 shift-registers w/latches ... strobe to latch the values...
"This is my first 8051 project so I am taking it slow :)"

That doesn't exactly sound like "taking it slow" to me!

Peter wrote:
"a single MAX7219 can drive up to 64 LEDs and control the brigthness in 16 steps. It need also only 3 lines to the micro."

This sounds like a better starting point!
Especially for your 1st project, why make life hard for yourself? ;-)