I cannot figure out what I am doing wrong

Check your phpmyadmin config file.

All lines (except comments) must be terminated with a semicolon ( ; )

After a lot of searching and reading on regex - especially on using shell expansion inside a regex - which generated a lot of trial and error - completely by accident I ended with the following - of course you need to be root to do this

sed -i -e "/blowfish/s/''/'$(openssl rand -hex 16)'/gi" /etc/webapps/phpmyadmin/config.inc.php