Just had the same issue with my old 98 beta. With the caliper removed you can see the piston come out and return in with each press of the pedal. So when the pad wears half way you lose the pedal effect and it feels like you have air or goosed seals. So new pads do the job and give you instant response. Maybe the piston seals are too small by design and allow the piston to move back in once the pdeal is released. I wonder how many kits for master and slave beta have sold for nothing. You could put packers behind the worn pads if you want to use all the pad and can't afford the £13 to replace them.
Hope this is useful.