There is nothing wrong with the basic design, it is a problem with the owners and mechanics.
Mine is a Rover 75, which is all BMW, uses all BMW parts and the same handbrake system, apart from it uses a compensator to balance the effort to each wheel brake. They both suffer the same problem, except the 75 additionally suffers from the compensator stretching or deforming - due to people having to heave too hard on the handbrake lever, to make it work.
Slack the adjustment right off at the front. Then do what most everyone including the mechanics fail to do - adjust the star-wheel adjusters at the rear.
With the wheel off, you have to use a straight/flat screw driver to push the edge of the star-wheel round. There is no consistency about which way you need to turn it, as the star adjuster can be assembled in the hub either way. The wheel will click slightly as it is turned, because the shoe return spring rests against it, to prevent it rotating by itself.
Even when people do adjust at the hub, they get it wrong - it needs to be adjusted so the shoes stop the drum rotating, then give the hub a clout with a mallet, to square the shoes and tighten some more if you can. Now back it off, just a click or two - there should still be some drag or contact between drum and shoe as the drum is rotated. That will bed in quickly as the car is driven. Refit the wheels, drop the car back on the round.
After both sides are done, you then move to the adjuster(s) at the front. With it on level ground, out of gear, tighten those up until the brakes start to come on, on the first click, test it by pushing the car back and forth. Aim for similar tension at each side.
Doing a lot of these as favours and finding the edge of the star-wheel difficult to spot through a wheel bolt hole, I devised a gadget to help see it. I fitted a 12v superbright LED on the end of a bit of twin flex, so that could be pushed through the bolt hole, to light things up. It works best at twilight if outside working.
The next problem is the interior face of the drum forming rust. As the handbrake is only normally applied with the car stationary, the drum never gets cleared of rust and rust dust is a fair lubricant. All it needs is a bit of regular use as the car is driven. Every so often, as you pull up gently at the traffic lights, with a couple of yards to still roll, pull the handbrake on one click, to polish up the drum and clear the film of rust. Once the drum face is polished up, the handbrake will get even better.
You should feel some handbrake effect with 1 click, at 2 clicks it should be very obvious, at 3 clicks it should almost be able to lock the rear wheels. The more clicks to fully apply the handbrake, the less tension you can apply with your arm on the lever.
I have modified hundreds of the compensators to fix the stretching problem as well as helping many owners to properly adjust the system, the last just a couple of weeks ago. No car has left here, without a brilliantly working handbrake.
