I have seen cases where pushing in the piston too quickly and/or without removing the reservoir cap damaged seals in either the master cylinder or ABS unit. The good news is that if you can hold a firm pedal for 30-60 seconds with constant firm pressure (after pump up), you probably don't have such a leak.

After more than 25 pad changes in my "career" to date, I have never touched the rotors on any vehicle, or had a case where the outer edge ridge or rotor grooves caused excess pedal travel to the extent you describe. I've replaced the front pads twice on my S80, and rear pads once.

Here is a test to see if your problem is caused by a air or the pads being positioned too far from the disc after being pushed back by the rotor:

(1) Engine at idle so power assist works.
(2) Obtain up a firm pedal and hold for 15 seconds.
(3) Release the pedal, turn off the engine, and go do something else for a half hour or so. Don't move the vehicle.
(4) Repeat step (1), then see if you have excess pedal travel again. If yes, you likely have a hydraulic problem (dealer or pro recommended).

If no pumping required for a firm pedal at step (4), here's the next test:
With car in neutral and hand brake applied, jack up each front wheel and rotate the tire 10 full turns or so by habd. This permits rotor runout to push back the pads. Now check pedal travel.

I've also seen cases where the "ears" of the new pads were binding in the guides due to burrs created by the stamping tool, causing one or more pads to be jammed at an angle. This reduces effective pad area in contact with the rotor. I always sand the burrs off the ears and grease the guides with hi-temp silicone grease. You can visually check for this.

I think I have some intructions somewhere for "brdding" new pads.