The two party system is so absolutely toxic to political discourse. It incentivizes conformity, extremism and hyperbole. It becomes a game of tug-of-war, where otherwise reasonable people take extreme positions to counter the opponents' extreme positions, until there's no one left in the middle.

The only way you get representation in government is if you happen to share (or choose to adopt) the beliefs of one of the two parties. So it may appear that 50% of the population is represented in government, but if 3rd parties became viable, you'd soon see that the party of fiscally irresponsible corporatists and the party of fiscally irresponsible corporatists who hate black people together represent a pretty small chunk of the population.