What to do with Z-Brick?

I would strongly suggest you stay with the first idea, to clean what is there and paint it.  Tearing it off will create a good deal more work and covering it will be nearly impossible.  Painted brickwork can really look nice, I like what you are describing with the glossy black.  I’ve done this recently with some chimney areas. As you said the key will be to clean it well.  I would advise TSP (tri-sodium phosphate) and a soft bristle brush to scrub it well, then a good masonry primer.  Your best bet is to go to where the Pro’s shop, a real paint store.  Tell them what you want to do and they can get you the right stuff including a thick roller to better cover all the masonry.