It's nearly inevitable once you start looking at things through a Game Theory lens. The analogy I learned for this is the "hot dog carts on a beach" thought experiment.
Imagine a length of beach stretching from Left (L) to Right (R) with midpoint M. One hot dog vendor wants to set up shop. He knows that people will always go to the closest hot dog cart.
If he's the only vendor, where will he set up? It doesn't matter. He's the only vendor. He's the closest by default.
But what's the most efficient place for him to set up? Assuming people come onto the beach anywhere and everywhere, the most efficient place for him to be is where nobody has to walk too far. That is, the middle:
If the vendor sets up in the middle, nobody has to walk further than half the length of the beach.
What if we had two vendors? What would be most efficient then? Well, that would be if they each set up at the one-quarter marks. Then nobody would have to walk more than 1/4 of the length of the beach to get a hot dog.
But while this is most efficient for people buying hot dogs, the blue vendor wants to make more money and has a sneaky idea: He moves over right next to the red vendor.
Blue knows that people will always go to the closest cart, and by moving over, he's captured a huge area of the beach that used to be red's area (indicated in purple). Poor Ted, way on the right, has to travel over half the length of the beach to get to a hot dog vendor. Blue is far away, but it's the better of two poor choices.
But let's say Red knows this strategy just as well as Blue and they have to react to each other. Every time one moves off-center, there's a bit of ground to be taken by moving closer to the center than the other guy. Where do the vendors end up?
Smack dab in the middle, fighting over the one guy who happens to come in right between them.
Well, heck, that's bullshit, isn't it? What if a third vendor came in and tried to establish a more popular spot? Heck, let's just shove our three vendors into their most efficient spots.
There, that's perfect.
Hey wait, stop moving over. You're gonna crowd out Green vendor!
Oh heck, Blue and Red have almost totally crowded out Green. Maybe Green can survive with just that little sliver of the beach, or maybe Green is going to go out of business. Either way, the Green vendor is going to get very little business compared to Red or Blue.
And in a nutshell, this is you go from many specialized political parties across an ideological spectrum to a pair of modestly-differentiated compromise coalitions dominating the field.
Now, this is just a model; it doesn't capture every part of reality. But at the same time, it can capture quite a few complexities with minor modifications. Say Red Vendor didn't care only about the number of hot dog sales he got. Say Red Vendor got a kickback for every hotdog sold on the left side of the beach, because that's where Giant Hotdog Company was located. Red Vendor would have incentive to drag Blue Vendor over toward its side of the beach as well, because the kickbacks would make up for some of the customers lost by ceding customers to Blue. That's how shifting the Overton window in favor of billionaires works.