I have 3. '98 tahoe 4wd with mechanical shift on floor. '99 tahoe "auto" push-button. '99 Yukon "auto" push-button. All 5.7's 4l60E's 4wd's. All pretty much stock. They ALL do the same thing. When I first got my '98 tahoe, I noticed that it was not as firm as my '95 Silverado. Went through the whole brake system on the '98 tahoe, everything checked out, and I didn't worry about it. It was my wife's truck and I had life insurance on her. Then I got the '99's and they seemed even worse. Lot's of pedal travel before engaging, and more travel before a hard stop. SO, for the '99 tahoe, I bought brand new front calipers, pads, and rotors for the front. NEW drums, wheel cylinders, and shoes for the rear. New rear brake lines as well. Bled (bleeded) everything twice, everything was new and perfect...and the same darn thing. It's just the way these trucks are engineered. They feel like it, but they don't go to the floor, far from it. They work perfectly, but they just feel spongy compared to other vehicles. If it is your daily driver, you will eventually get used to it and not freak out. As long as you don't have an ABS code or other issue, it's just the way they are.
There are millions of complaints about this, and tens of thousands of folks that have tried upgrades to remedy the issue, but most have little effect. Compared to newer models of light-duty suv's and trucks, the OBS tahoe's and yukon's have small underpowered rotors and drums, but they work. It's just something that must be gotten used to after time. I have read that GM did this for the "soccer moms", so that they had a soft "feel" and an easy to push brake pedal for women. But who knows. It could be an inherent design of the "then new" ABS system as well. I have not tried an upgraded master cylinder, but have read many posts with mostly negative results. Hydro-boost is costly, do your research first. And for what it's worth, Semi-Metallic shoes/pads are what should be used for our SUV's, they are the best combination of wear, stopping power and life for our vehicles.
And for those not mechanically inclined, if something seems wrong, please have a good shop take a look at your brakes, it IS the most important system on any vehicle.