EDIT: To the people downvoting this post because democrats > republicans: you’re missing the point.
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Because:
A: the system is able to elect candidates who win despite only getting a minority of the vote. This problem becomes worse the more parties participate.
B: in order to maximise the chance of an acceptable compromise taking office, very fringe groups must vote for a very mainstream party. Usually that leaves only two parties that make sense.
C: as these parties become the political space, voting for a specific interest can erode support for the nearest main party, guaranteeing a victory for the other main party.
Bonus: D: growing comfortable with their voter base, it is in parties' interest to grow more radical.
In fact, without McCarthy and the Red Scare, I would find it strange that the American political scene has developed a nationalist "Republican" party and a moderately conservative "Democrat" party. Many more sane parliaments and governments develop their left to be a socialist or labour party.
So our choices in America are between conservative and slightly-less-conservative? So there's a growing demand for a socialist party that doesn't exist, but if it did exist it would lead to the domination of conservatives in politics?
Sounds like ranked choice voting would really help out with a lot of the issues that you presented. It's too bad that the people who make our laws were voted in using the old system and changing that system in any way is a conflict of interest for them.
I guess things will only ever change if we force the issue.
It's one of the reasons why I think America is institutionally fucked & rotten, that it'll take the better part of two centuries to fix it, and that if instead we want stuff to be fixed within a generation, we may need a violent uprising.