Truck is 2011 and has a 6" lift on it. I think the issue is the lift kit used a e-brake cable drop plate to lower the cable, as shown in the picture. So the cable location is lower than stock and will hit the power step arm when it's retracted.

The arm will push the cable up abour 1 inch or so. When the e-brake is engaged, i'm a bit worried that at some point the cable will snap? Is there any solution for this?

 

Shorten the drop bracket, I have a 4" lift on my truck and I didn't even bother with that bracket. I left the cable in it's stock position. Yes I use my parking brake daily.

With that said you should be able to whack at least 2" off to clear your step.

 

Yea exactly what rnlcomp said, just take the drop plate off and drill new mounting holes about an 1.5" to 2" down. And just take a cut off wheel and cut off the excess. probably a 30 min job.