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It is possible for pedal to get soft/spongy with the *pads* going off. Old Hawk HPS pads did that to me at the track years ago, I bled and bled and bled but pedal would get soft and even try to go to the floor after a couple of laps! Then I noticed the pads were pretty much gone. Threw OEM pads back in there and the brakes came back!
Anyway, if the change was noticed after changing pads, pads could very well be the issue.
Regarding fluid, name-brand parts store DOT4 or DOT5.1 (*not* DOT5!) is fine for any street application and most track applications. I've gotten better results with OTS DOT4 and 5.1 for street/track than some track-specific fluids I've tried. Never overheated/boiled at the track and last a lot longer between flushes than track-specific, in my experience. I can get through half my track season starting with fresh fluid, then do a caliper-bleed midseason and I'm good for the rest of the year.
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