It might have been something as simple as the worn brake pad tilting in the caliper and binding up, causing it to drag and wear further.

Just one more reason to try to prevent the pads getting below one quarter of their new thickness!

As to parts to replace first, I was always taught to start with the most likely causes of a problem, especially when you have one that is already obviously broken or worn out.
If I were to be working on this, I would be looking at a possibly rusted/worn caliper on that corner as well, before I would install a new master cylinder.

In applications where there is a sliding caliper, greasing the slide pins makes a world of difference, but I seem to remember (it's been a while since I've had to do rear brakes on my cars) that this is a fixed caliper, so not an issue here.

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-Josh
Testing the cheap Mercedes axiom, one bolt at a time...