I have done lots of reading over the past week trying to figure out my situation with no luck.

My right front brakes pads were worn and needed replacement. So I changed pads which I have done a few times in the past. Upon compressing the piston back in to the caliper my Master Cylinder overflowed (forgot to open the top) anyway, changed pads, topped off the MC and reversed out of the garage. My pedal went down 3/4 of the way and then finally started to slow me. So I bled the brakes and still had the same problem. So I hit the forums doing some reading and I read that a MC may be damaged by compressing the piston in a caliper so I bought a new MC, bench bled it and installed it. Same exact problem and tried bleeding the brakes again with no luck. Got sick of the situation and took it to the shop where they bled the brakes and said the pedal was still soft. They also said my rotors are a "little" undersized and my rear shoes could use replacement and he is confident that should fix the problem...if not maybe I purchased a faulty MC.

My question is...will rotors a "little" undersized cause a pedal to be that soft, along with shoes that are still good but getting worn?
My second question is, how often do MC's come defective from the factory? It was an Autozone MC for around 85 bucks. I appreciate any info someone with a similar situation can provide. Thanks!