Except since there's no chance for a 3rd party, these two parties hold too much power and it suddenly matters much more. If it was like other countries with tons of parties that rise and fall, you'd be correct.
Also what do you mean by insane levels of populism? Isn't that just a derogatory way to say "what the people want"?
There would be more of a chance for a 3rd party if people bothered to care about the house rather than just the presidency...
But yeah, today there's little chance. But so what? Plenty of progress, far more than today was made in the past before the primary system. Several great presidents (including Lincoln, FDR, TDR) came from the old process. Meanwhile the new process gave us Trump...Not to mention, tons of members of Congress afraid to do anything sensible because they are too afraid of primary challenges by hyper partisan people on their side.
UK doesn't have a primary system (mostly -- they did for Labour who are now saddled with Corbyn) and they don't have a stupidly gridlocked govt. Neither does Canada. Both of those countries have politics dominated by mostly 2-3 parties. In fact almost no country on Earth has it to the level that the US does.
Re:"what people want" -- for one thing what people want is often contradictory. For another, there's a reason why the US doesn't have mob rule by majority. What people want is not always coherent or wise. IMO our goal as a society should be a functioning govt and a liberal polity for which democracy is a means. But by no means is democracy a good in an of itself for me at least.
Also what do you mean by insane levels of populism? Isn't that just a derogatory way to say "what the people want"?