A drop in voter participation creates an opportunity for an alternative party to fill the void. That market opportunity simply wouldn't exist if always accept that we have to eat whatever crap the two major parties decide to serve us.
If the two main parties were to drift well away from the opinion of the voters, and the voters all picked the closer option of the two, then one party would become dominant, the other irrelevant, and then there would be an option for an alternative party to fill the void closer to the voters. Note that this would be the case in any other voting system as well: whatever your preferred party is only gets to power at the expense of one of the others. The main reason this doesn't happen often is that the politics of those parties tends to shift to try to win those votes.
(IMO, the sad fact of most democracies nowadays is that the government does in fact tend to reasonably well represent the average of what the voters want, in terms of method if not results. Given the state of them, I think it reflects poorly on the voters, but there's not really any better way to align government and populace)
I really don't know, it would depend on a lot if factors. More important to me though is that I think it's st least a possibility in that scenario, as long as a vast majority of voters believe they only have two options we won't have a third party step in.
