There are three problems I think.
#1 is that the calipers are just a poor design and introduce a lot of friction between the caliper and the pad, which then needs more pedal pressure to generate a decent amount of friction between pad and disc. Big Red's brakes (standard 2-piston sliding calipers) are better than any of my S8s.
The solution to this is different calipers. B7 RS4 calipers work well, but are excessively expensive, as are the discs. Aftermarket calipers can also work well, but again can be very expensive. Tbh there's not really a cheap solution to this which I have found yet, although I keep looking.
#2 is the ESP return pump which is fiendishly difficult to bleed properly and so makes it likely there is air in the system despite best efforts to the contrary.
The only solution to this is to never let the system run dry, and to change the brake fluid regularly.
#3 is the flexible bulkhead which is the root of this thread. Some of the pedal effort goes in to moving the sheet metal rather than pushing hydraulic fluid to the calipers, which reduces efficiency and pedal feel. My A6 has better brakes than any stock D2 because the pedal cluster is totally solid.
Some kind of bracing is in order, hence the block between the master cylinder and the strut brace