While the two party system does have problems they tend to be vastly overstated (and are much more difficult to solve than the complainers want to acknowledge).

The problem is that US conservatives, both elites and ordinary voters, have become profoundly radicalized since 1964, and specifically since the Civil Rights Act (Edit: though the underpinnings for this started with McCarthyism and Brown v. Board - it was really the 1964 election that moved this radicalism into the white conservative mainstream, not just the Birchers.)

In that sense things are really similar to Weimar Germany, which was a multiparty democracy in which there were many viable non-Nazi options for conservative voters. Yet German conservatives across the board decided that a Nazi dictatorship was preferable to a democracy where socialists might win. In general it is very difficult to sustain a democracy when 40% of the electorate rejects the concept.