The original set-up shouldn't fade under any circumstances, if they are you have a fundamental problem that needs addressing. I'd renew with Volvo pads and good quality 316mm discs and fresh fluid and see how they are then. If that dosn't address the fade then investigate any cause of excessive heat build up like binding calipers.
If its just response that's lacking, try replacing the flex hoses as these can start ballooning with mileage.
Not wanting to sound overly cautious, but modding a safety system like brakes away from the original spec isn't a good idea, there may be knock-on effects which you don't realise. Drilling out calipers may weaken the casting in that area to the point of failure after repeated braking.
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