Hey guys,
I've been contemplating this for some time and truly I am now at the point where the anxiety and avoidant behavior isn't doing me any good. Not to mention it keeps on making my CV look worse and worse the longer I drag it out.
I should have quit in the first year when I wanted to. I'm now three and a half years later.
Is this going to ruin career prospects? Will I be able to get back into a graduate programme down the line if I found a proposal I really want to pursue? Will employers all think I'm uselessly lazy?
Edit: I am currently employed, so there is no risk there - but I'm getting paid peanuts.
From a professional perspective, 3-4 years for an MSc is actually fairly typical - usually it just means that the student wasn't quite ready to tackle the chosen topic (possibly not strong enough in undergrad, but also possibly the topic was too ambitious - partially a failure of supervision). In the US, the first real research degree is usually a PhD, and this usually follows after 5-6 years of coursework. If it drags on to 4-5+ years, it really looks bad - usually it implies that the student is sufficiently far removed from reality that they don't know when to call it quits. If a student finishes after 4-5 years, the worst possible thing to do is enroll in a PhD program - this is usually the origin of the 5-7+ year PhD.

, which looks horrible on a CV - at work we just skip past those.
I'm not sure what your field is (my guess would by chemistry, biology or physics (the "paid peanuts" bit)), but the thing to be careful with there, is that working in some of these fields really requires post-grad degrees for any type of career advancement. If you work in IT, or have developed "IT skills" on the side (common among non-comsci post-grads), you're probably fine since a lot of the work in the IT industry won't require a post-graduate degree anyway.
Getting back into academia at a later point, really depends almost entirely on your personal interaction with your potential future supervisor. You will have to have to come across as driven and have a good story about why you left your previous degree (over ambitious topic, had to work part/full-time, that distracted you but aren't applicable now, personal issues that are now resolved, self-maturation. etc.) - it will really be this that determines if you get in again.
If you do manage to get back into academia, from a professional perspective, there will always be questions (reliability, does this person know what they want to do, maturity, competency, etc.), however, from an academic perspective, if you do a strong and fast MSc (do it in <= 2 years), and do it well, so that you can follow up with a strong PhD with
good publications - this will be all that will ever matter from an academic perspective.
In terms of your thesis: is it really far off from completion or are you holding onto it because you are a perfectionist, or perhaps you are someone that can't recognize when they have made a contribution? I've seen a lot of MSc and PhD students get caught up in a cycle of "I now fully understand this - so it's easy". Understanding does not imply easy - not everyone has been poring over the same set of 50 papers for 3 years to gain your understanding - even an incremental change/observation that requires the kind of background that is now unique to you and a handful of others may be significant - get the opinion of your supervisor as to whether or not it is ready to be submitted, or if it's ok to stop research and just finish up the write-up - take this
very seriously, since your personal take is almost certainly skewed by your years of immersion. Also note that you don't have to do your master piece now - you have the rest of your career for this.