I've got drilled dual discs, stainless braided lines and an F2 MC on my K1, and they work very well indeed, wet or dry. While I was waiting for the F2 MC rebuild Kit I used a late model Suzuki GSXR1000 MC, and it worked even better, but looked kinda weird on a laid back "Kruiser".
What's the difference between an older MC with a larger than standard piston (i.e., my set up) and a modern MC with a smaller piston, but longer stroke? Cheers, Terry. 
The smaller master cylinder's piston increases your grip ratio, or leverage, hydraulically. However, the amount of fluid that's moving must remain the same, so the angles of the lever are changed, usually by moving the pivot further away from you (and the handlebar) and adding a curved, sliding surface to the inboard side of the lever. It sort of rolls in against the piston this way, which often makes the newer ones wear faster from the sideways loading. Honda's racing (Yosh) masters were made this way, even in the 1970s, but I think stock Hondas went the "push-in" route for long-term reliability, and because they weren't really sure how hard people would grab the brake. The straight-in push of the stock cylinders makes for very little master piston wear, and it takes a gorilla grip with the stock piston ratios to lock up the front brake and wheel.
There was special "training" literature given to the first K0 buyers about "easing into the use of the powerful front disc brake by testing it in an empy parking lot and on wet surfaces before riding in close traffic". It was a 2-page bulletin, just typewritten with the Honda logo on the top of it (we had one hanging on the shop wall where customers could read it). Honda was obviously concerned about it, but I could never lock my front brake until I added the second caliper. Of course, then it took 2 fingers to slide the front right out from under me, and my alternator cover and left rear footpeg made its first 3-point touchdown debut! It was sure nice in the race corners, and on the wet roads of Washington and Oregon, though, as I kept them very close to the discs (.003" clearance) to minimize the lever travel, and this swept most of the water away. The disc must be perfectly flat for this to work, and some are not, especially on the K4-later bikes. I noticed several K4/5 bikes that had slightly warped rotors, brand new out of the crate, in 1974-5.
