The major problem with the American party system is that it supports polarization in the electorate. The two major parties control the levers of power with regard to the electoral process, and they work hard to make a challenge to either party very difficult. Thus, the two major parties end up being the only competitive parties for national and statewide races.
Since voters only have two realistic choices for their vote, they tend to vote for the party that best encompasses their policy beliefs initially. This can require a significant amount of prioritizing to determine which beliefs are most important. However, over time the political parties begin to take on the appearance of tribes and voting for one party tends to take on the importance of an aspect of the individual's personality. Individuals then begin to change their beliefs to conform with the position of the party. This is why seemingly contradictory policies, like reduced regulation on individuals and businesses and strong laws against abortion or marijuana, come to be held by the same individual.
As party identification becomes personal, it allows individuals to be carried farther to extremes. Polarization justifies viewing the opposition as enemies to be destroyed rather than individuals with different views. This has helped drive the polarization of media and of the electorate.