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Notes -
Lot of research has been done on this. There is a whole study in economics called "Public Choice" which studies these sorts of things. You are correct to notice that this is strange and doesn't make sense compared to other markets and products.
The main explanation is "first past the fence voting". Any system with a majority wins and takes all is one where only two parties tend to persist. One to win and one to chase the other. The chasing party will occasionally catch up and overtake the winning party. In European parliamentary democracies they often have representative voting, so as a party you only need to get a small portion of the vote to be part of the government.
What is also relevant is something called the "median voter theory". Since the US has first past the fence voting, the winning candidate will always appeal to the median voter. This tends to moderate candidates. As someone who is not a republican or democrat (im a libertarian), my perception of the two main parties is that they are mostly the same and tend to govern mostly the same. More wars, more government spending, more government intervention, rollbacks on government spending are minimal and ineffective. They tend to perenially disagree on issues that split the american people down the middle, but politicians on either side have little benefit to resolving those disputes.
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