For Commercial vinyl tile the cement floor must be sound, clean and reasonable level. Sounds to me like your 8 year old paint need to be scraped down to the concrete floor, then if all else is well just go over it with a quality vinyl tile adhesive.
The only way I can see grinding a 1/4" of concrete is if the existing concrete (not paint) is very "lumpy" And if this is the case vinyl tile is not the product for you! Maybe ceramic tile or carpet....