At this point I need to know:
1) do the stock coils need to be grounded to the actual frame (remove the powdercoat)?
The coils don't need a ground. But, some bikes have the green harness ground at the coil mount, and must have a clean metal to metal connection there.
2) does a weak ground at the handlebars matter at all?
Well, yes. But, not for spark. Frame ground is a pathway to the battery NEG terminal, For the bar is must go through the neck bearings and grease. Ok for the momentary contact for the starter solenoid and the horn. But, you don't want constant current flowing through roller bears and their races. If water ever gets in there, you'd get electrolytic corrosion.
3) do coils fail or get weak? I thought they just work or they don't.
Anything man made can fail. Coils are pretty robust if not physically abused. The wire leads are what usually fails first.
4) what am I overlooking?
A few things.
1- the points may have a preservative coating on the contacts that hasn't worn through on the 1,4 points. Burnish the contacts to remove the coating with some card stock.
2- You can try swapping the condenser between 1,4 and 2,3. If the problem follows the condenser, then replace it.
3 - Be certain the power lead is solid to the coils B/W connections. Measure the voltage there to see if it gets all of the battery voltage. If not, you have lossy connectors or switches.
4 - Do check your battery voltage to be sure it's well charged. Turn off the headlight/lighting to increase voltage to the coils.
5- Look at the coil spark leads while running in the dark. Arcing through faulty insulation points will glow.
However, if you have spark on all four spark plugs, then it is time to revisit carb issues. Verify actual fuel level in the carb bowls. It doesn't take much zap to start the proper air/fuel mixture.
Cheers,