I have hayes mag brakes that are spongy ( the level hits the handle bar to engage the brake)  Does this mean I need to bleed the lines, because I already put fresh rotors and pads.  Does it ever get to a point when a hayes mag will just be toast and it is time to trade up or can this problem be solved with a bleed?

try bleeding em sounds like you got air in there... if after blleding they are still like that, actually while doing the bleeding, check the hose, and everything, make sure they are tight