If people could vote as they truly wanted without fear of throwing away their votes, the center would almost certainly move.
As to the back and forth between two major parties, that's hardly surprising. I'm not sure that indicates much in terms of what people actually want.
Systems with ranked choice or similar measures to encourage smaller parties end up with a similar situation, but with less stability. Since those parties appeal to narrower bands of society, they are unable to form a government. Eventually they are forced into coalition, which brings them to the same place as the major parties in FPTP: compromise. Yet, since coalitions are inherently more fragile than parties, you get less stability, and less institutional pressure on individuals in government and cabinet to represent wider interests.