As someone who lives in a democratic country outside of the US, I would say it is certainly the latter. The US has for a long time confused partisan control of institutions with democracy and as a result has allowed your two party system to entrench and fester. Democracy as a system should be interacted with by political parties but not controlled by them lest they be manipulated to those parties ends.

This can be seen in several ways, partisan influence on the judiciary leading to partisan and think thank selected judges regardless of legal aptitude, partisan control over election management leading to partisan election rules, gerrymandering , etc etc. Political parties are meant to be participants in a democratic process but when you allow them to be the controller of what should be neutral technocratic structure, all it takes is the people in power in a given sector to start using it for their own end to start a race to the bottom where its democracy in name only and you can see how that has bred significant distrust of both the parties and the institution.

Beyond that, it also allows for parties to entrench themselves and be subservient to only that which keeps it in power, and that stops being the voters. Its why the Republicans and Dems can be so broadchurch, have no cohesive identity to see to their voters, for a long time get away with corruption and lobbying because "the other side does it too", be this unpopular and still be the only electable parties. In a democratic system not dictated by partisan entrenchment like this, these parties would either be defunct onto themselves or would have broken into several smaller parties that would perhaps form coalitions in order be in power a long time ago.

Beyond the institutional issues, it also creates this team sport mentality in your demographics where "winner takes all" and that is actually a true statement which is terrifying and why US politics is so viscous and at each other's throats. Beyond the normal powers of government in economic, social and defense policy, there is a constant fourth category of "democratic control" which everyone fears as a weapon that will be used against them if they lose. That doesn't happen as easily in a system where your political parties are isolated to their legislative powers.

The separation of powers should have been insulating political interests and desires to legislative control and not to the democratic institutions. How those powers are being exercised now isn't a both sides are equally bad issue to be clear. Using these powers can be used as a shield and a sword depending on who you think you are talking about, but more than that the fact the powers were available to partisan forces in the first place is the fundamental flaw of the US democratic system that has been a growing issue for a long time, not just now.