I don't understand your problem with the system. Based on a previous post you have good scores. All around 760, great scores actually. You're not a major credit risk. Your car loan inquiries and whatever else aside, your scores are still in the uppermost range of credit scores.
Your problem seems to be that you have a thin file. You didn't think you needed credit and were using cash only. I believe you said that you didn't have any card at all before the Capital One card. Well, this is a more conservative credit environment. Lenders want to see someone with a history of responsible use of credit before they hand them a giant unsecured line of credit.
You apparently went for a good while not using credit at all, so what do you care if you have a low limit Cap One card. Just use that card responsibly and apply for something better in a few months. Do a little research here on the good cards for people with limited history. In a year, you'll likely have several better cards with decent limits. If you don't want to wait, look at opening a secured card. Also, have you considered credit unions? They are typically more generous with limits.
Starting Score: ~500 (12/01/2008)