Brake fluid absorbs moisture over time. This water boils under heavy braking causing a spongy pedal and fade problems. It can also lead to an early failure of the brake system's hydraulic components. It is generally recommended that you bleed your brakes thoroughly once every other year to prevent this from occuring.
When dealing with brake fluid, there are a few important things you need to understand. First and foremost, only use fluids designed for your specific vehicle. All brake fluids are rated by two temperatures. One is referred to as "wet" rating the other is "dry". In the real world, the wet number is the important number. Dry refers to the brake fluid in it's pure state whereas wet refers to fluid that has (inevitably) been exposed to the atmosphere.