It looks to me like you have too much slack in the cable. I usually adjust my brakes so that that the brake blocks are only a millimetre or two away from the rims.
Cable friction was definitely the right place to start. Next I would check for kinks in the housing. It looks like they may be one right before the ferrule that sits in your brake lever. Next, detach the cable and make sure the cantilever arms are both moving freely and have decent spring to them. Sometimes the posts they pivot on get corroded and should be cleaned/greased. Check the lever too, maybe it's not moving smoothly. Last, you can up the spring tension at the cantilevers by either swapping the hole the springs lodge in or by tightening up the fine adjustments on the springs to give them more tension. But this is fixing the symptom rather than the cause.
x2 for lack of tension in the brake cable.
Bob, Dave and Xer - I dunno. Those were good thoughts! Brothers, I imagine that Hoi may have a classic case of a worn ferrule and a compressed housing end. You know how, sometimes, a brake cable strand will push through a ferrule tip when it gets old? That little piece of steel winding gets wedged into the ever-enlarging hole in the ferrule until everything just binds up? Teflon liners can't Save The Day in that scenario. Correct?
Regardless the kink in the housing at the lever, it could be at any point along the whole run.
Hoi - release your brakes by sliding the bullet-shaped aluminum piece out of the connecting arm at the wheel as if you were removing the rear wheel. Next, with all of that slack cable to play with, take all of the sections of housing out of their frame stops. At each short section of housing, pass the cable through, feeling for any resistance. If you find a section that you need to Force to move, there is the problem!
Look at where you are getting drag / friction. My bet is that something looks 'bent'.
Wheelies don't pop themselves. (from a QBP fortune cookie)
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