98 Amigo brakes question

I have 90k miles on my 98 Amigo. It has the original brakes on it. I started hearing a brake grinding noise recently. It wasn't bad but I wanted to be proactive so I pulled off the wheel to look at the pads.
To my suprise they had plenty of pad left but there was a very deep groove along the top and bottom edge.
This was caused by the lip on the rotor. Is this normal? A picture of what it looked like is here: .

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