It is a closed system and fluid level should remain constant, relative to the piston resting position. As mentioned, as pads wear, the piston rests further and further out and this movement must be made up with additional fluid from the reservior. If you replace pads and the fluid level does not go back up to where you started, then you have lost fluid somewhere, which means a leak.
If you add 1-2 oz a year and do not have fluid overflowing out of the reservoir after a brake pad change, that is a good indication you have a leak somewhere. The system does not consume fluid during normal course of operations and it doesn't evaporate.
Larry