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This may sound harsh, but you really just let them walk all over you. They controlled the situation and you let them waste your time. I congratulate you (honestly) for not making a purchase out of sheer frustration.
As the above posters said, dealerships are not automatically evil. You may pay a little more than a person to person sale, but depending on the laws of your area you may be protected by lemon laws, so it may be worth it. Take the $2K markup you saw with a grain of salt -- that's more like their "sucker price". They'll sell most of their cars for a negotiated price well below that.
Do your homework, know which cars you want, know the blue book value range for each, and be prepared to walk immediately if a dealer tries to push you towards a car or price that isn't what you're looking for.
And that's the key: Be prepared to walk immediately. This will require being downright rude in some circumstances. The worst salespeople are counting on the fact that you won't be rude. This is part of their game. Rise above it. Call them on it. Take a friend with you if you need help pulling the rip cord.
I recommend not giving up on dealerships just so you can practice getting better at dealing with their various sales tactics. It's a good life lesson.
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