Moose I am still not with you on this. You do push fluid, but the amount you are pushing is TINY. The simple fact is if you are pushing a lot of fluid you have 1 of 2 problems, either you have a lot of air or you have a very very bad master cylinder to caliper piston diameter ratio.
But lets go through it logically so we can see where we differ.
So first paragraph. I agree that diagonal was the way it used to be done. There are a couple of issues with diagonal. First off as CR stated diagonal give 50% of total braking. The problem with this is as follows. Like CR said 70% or well it really depends on what setup you are running, of the braking is done by the front axle. If you then say half of that or 35% is being done by the left front and 15% by the right rear this creates a major force imbalance in the car. While this car be corrected via steering input this I find is not very stable. As for losing the front brakes and only having the rear, you will only spin if you are pushing the car hard and have lost the fronts. Personally I have boiled the fronts on track and found that the decreased effectiveness on the front axle has made it a challenge to drive, but not unsafe.
Paragraph 2. The system is 2 individually sealed systems. We use split master cylinders in these cars. Therefore while you can have uneven braking pressure between the 2 sealed systems you have to assume that the proper brake bleeding has been done which will result in a minuscule delta between the 2 systems. Without that assumption all is lost. Now here is where I get to the major issue. You said that the fluid moves through the system. The problem is this: No more fluid is added to the system, the reservoir is designed to only add fluid back to the system as the pads wear and take up the compliance volume. Therefore the actual movement of fluid through the system is TINY. You are correct that in most systems the rears contact first. This is caused because the compliance volume on the rear is typically less than the front. But, this is a good thing because this actually helps with braking stability. When the rear brakes start to stop the car first it actually helps to settle the car a bit. But let us be more accurate. The amount of movement that the caliper must make to start exerting force on the rotor is very very small. This is why when you rotate the wheel with the brakes off you can actually hear a little scraping. The gap between the pads and rotors is very very small. So that is why the amount of fluid and therefore stroke of the master is also small. I mean look at how far you move the brake pedal, and remember that the connection to the master cylinder is above that. The total input stroke on the master cylinder given by the pedal is very small. And then once you have taken up the compliance volume you actually do not push more fluid through, you are talking incompressible fluid and pads and rotors. And the idea that you could have reached full braking force in the rear without having the fronts working at all also goes back to the assumption everything is bled properly. This just doesn't happen. Now as for bottoming of the master cylinder. I have never had this happen on any braking setup I have used because there are ratios between MC bore and Caliper bore that are pretty much the norm. In fact unless you start buying aftermarket components I don't think you can buy BMW parts to get out of the correct ratio range. So I guess my point is this. If you have the system bled, the compliance volume is so small that you will never have what you are describing.
I understand about going the way BMW did it, and I fully respect that, in fact I am a champion of that more often than not, but in this case the ABS setup is exactly what OP is suggesting to do, just with the ABS pump removed. So therefore it is just like every E28 out there, only the ABS pump does not function. I can say this because the ABS pump on these cars does not provide any additional line pressure like versions from later cars that have traction control or EBD. And this also goes back to Paragraph one, if you lose an axle on an E28 with ABS, or any BMW with ABS for that matter you will have either front or rear.
Paragraph 3. As for rear bias, you are correct that you need to use a larger MC piston bore. But as you can research most BMW MCs have the same bore front and rear. This means that balance is all done by caliper piston bore diameter and rotor diameter.
Paragraph 4. Yeah there were a lot of variations. I guess the most experience with E30 braking systems I have are M3s and 325i. I do remember doing a rear disc conversion on a 318i and that required some new parts, but can't remember what we did.
Anyway, I suggest reading the following book.
http://www.amazon.com/High-Performance- ... 1932494324
I believe this is just the latest version of the one in my library, but unfortunately I don't have it here in Germany. This book gives the theory and the math to show what is going on.