You can always use some base grain in the steep, but keep to the established water ratios and you're really just doing a mini-mash.
I have a 2 gallon mash tun that is real tricky to use unless it is just a mini-mash- which I'll either no-sparge or batch. I'd rather just use a bag and a pot of water.
I too have a 2-gal mash tun (in addition to my 5-gal for AG) and last night, doing an extract batch for the first time in several years and not wishing to fiddle with the little MLT, I went #nopants on my grain-steeping. I warmed the water to 160 in a large saucepan, poured in the steeping grains, put a lid on the pan, set it on two potholders on a kitchen work table, and covered it with an inverted Trader Joe's insulated grocery bag. The temp held fine. I strained and sparged through a large kitchen strainer lined with a 1-gallon paint strainer bag. I have a super-duper-large strainer and 5-gal paint strainer bags that I could have used if I had a couple pounds of grain.
To get back to the OP's main point, I spent a while doing mini-mashes and I agree, try going to all-grain. Remember, you don't have to make 5-gallon (or larger!) batches and you definitely don't have to spend loads of money. I see a lot of people doing 3-gal BIAB. As erockrph says, all you need is a bag. I personally would rather deal with my 5-gal cooler than a wet, heavy bag, but it's a very cheap entry point.