Yup, that's what happens when it doesn't get changed every year or two. A car that sits outside will undergo termperature cycling on a daily basis. At night when it's cold, the metal brake master cylinder will condense water out of the air contaminating the fluid.
I work on a radar system that has this problem with waveguide. We have a dry air supply to keep it from happening, but alot of times the site techs just ignore maintenance on it.
One thing is that (in my experience) once you have fluid this bad and flush it, you can see some caliper leaks show up. You might want to monitor it.
Also, if your car is a manual, the clutch master/slave cyl is (usually) run off the brake resivior. You might want to bleed this out also.
What else, '73 MB 280 SEL (Lt Blue)
Daily driver: '84 190D 2.2 5 spd.