2001 Toyota Echo Question: Gradual loss of brake pressure

Pull up the hand brake and apply the brake pedal, does the pedal feel better, if so the rear brakes probably need to be adjusted. If you bleed the brakes and you get air that isn't normal. The hydraulic system is sealed and air should never naturally enter the hydraulic system. Turn of the engine pump the brake pedal the pedal will get hard when the brake booster exhausts its vacuum stored. With your foot on the brake pedal hard ,start the engine the pedal should get soft as the engine starts and runs if the booster is working correctly (this is your brake booster assist).
Now with out disconnecting the brake lines at the master cylinder, remove the two bolts that secure the master cylinder to the booster, look at the rear of the master cylinder do you see signs of fluid leaking from the rear seal of the master cylinder. If not re attach you don't need to bleed you haven't opened any hydraulic lines.
If the pedal is soft, it is frowned on but get a small pair of vice grips, put a rubber hose over each jaw and gently clamp the flexible brake hose going out to each wheel one at a time, if you have a hard pedal when you clamp off a brake caliper you have a bad caliper or problem in that corner of the car. If the pedal sinks to the floor it is probaly what you suspect, a bad master cylinder.
I am always curious. If you replace the master cylinder, take apart the old on and see if you visually see a score in the bore or a defect in the seal.

sorry but you have an internal leak in the master cylinder.at least you dont have abs they are alot more money to replace