If you're sanding by hand, are you sure you're taking off the top of the wood? I mean, if the pits are still there, how much are you actually removing??? Also, what type of wood is it? Some woods naturally pit, and aren't from gravel on shoe-bottoms.
If you're really getting frustrated, with stairs that are ~100 years old, write the pits off as character in the wood. Heck, my 12 year old Jeep Cherokee has 3 windows that don't go up and down 'right' any more, sometimes you have to push the shifter for the ignition to turn off, and sometimes the front end pops. It's character. Anyway, if you have more, do post up.