The second is if you introduce a 3rd party, it makes it incredibly easy for extremist groups to get in. Green saps votes from Blue, and Blue loses to Red when it otherwise would have won, Red and Blue are divided or apathetic and Green takes the majority as a result, etc. The idea being short term political whims shouldn't be allowed to create instability. Of course you can argue the validity of these arguments, this was part of the intent when it was created.
I don't think this would be the case, as I don't think a third party would ever have too much power too much power in the least. Lets take some other countries political systems for example (systems where you're going to have multiple parties) usually just ends up drifting to where you have two parties (just not by name, they'll drift to be in a coalition / alliance with one another)
So even if your country has multiple parties, you still end up with a two party dynamic (in most places) as people want to centralize power.