shop manual says that if the brakes aren't spongy and there isn't any air in there, then it's OK.

WWAWMF (what would AW Motorcycle forum do)?

Yes, all DOT4 is hydroscopic, if the fluid is 3 years old, even if the brakes aren't spongy, i'd replace it. Is it turning brown? I imagine it isn't clear anymore. What year VFR do you have? I'm on my second '04 (look up one thread)

98 with the K&N PowerCommander. Takes the lean spot done for emissions right out :-)