Normal travel varies from one master to another. How far your's travels is probably different than others. Most don't travel very far once the brake are bled, but may have 1" or a bit more travel when bench bled or before the system is firmed up.
When you bench bled the master did you get flow from the front and rear ports? If you did then the master is good.
If the master bled out good, then I'd question the proportional valve, and whether it is creating a bleeding issue. Sometimes you have to bleed the fronts first because the master is a dual and may be stopping the travel once the rear is bled and firm. I had the same issue with the master on my Austin gasser. It would allow me to bleed the rears, but then the master was firm and would not travel to allow front bleeding.
I ended up putting a vacuum pump on each wheel and vacuum bled all 4 wheels, then the system was fine.