I had this issue with a '93 E36 convertible that was given to me a year ago - handbrake next to useless. The weekend before I sold it, jacked it up, took off the caliper, rotor retaining screw, and rotors.
Problem solved: the adjustment was far out of whack as I expected, and the lining on one of the shoes had disintegrated. Given the absolutely rotten condition of several areas of the car from previous owners, this was not unexpected.
SO.... remove handbrake lever boot, slack off the two nuts on each cable. Observe the direction of the adjusters on each wheel (they snug up in different directions). Reassemble rotors and calipers, then use a narrow screwdriver to run out the adjusters until there is drag, then back off a "little bit". Use pliers to pull the handbrake cables at the handle, and run the nuts down to the lever. Check for drag and back off the nut(s) if needed, then snug up the second nut on each cable. RESULT: handbrake holds the car on steep hills with four clicks.
You already went in for a look and things appear okay. I suggest a couple things... make sure when you pull the lever, that the cables actually move the lever inside the rotor. Do the adjuster thing at each rear wheel until there is drag when you try rotate the rotor. If it won't display drag, you may be adjusting in the wrong direction, verify (usually by removing the caliper and rotor again, ugh, wasn't once enough?).
To test, roll the car slowly backward and pull up on the lever. The side of the car that raises is tighter than the other side, adjust the cable length under the lever boot accordingly.
Even with no friction material on one shoe, I got the 'vert handbrakes nice and tight as they should be. I told the buyer of the situation and that a set of new shoes was about 25 bucks. No response in that area to date, several weeks later.