Let me address some of your points...
But not owning capital doesn't ipso facto make you a socialist. Buying car insurance is a capitalist, free-market transaction.
True, being broke does not (in and of itself) make you a socialist. I don't think I said it does, my apologies if I did. However, you could be considered a socialist (albeit an unknowing or reluctant one) if you need to participate in these co-operative organizations (like an insurance policy holder or 401k investor or job holder) because you don't profit enough from your capital to cover your costs.
Besides, most people in the West are capitalists, as they own part of all of either a house or a car. A 'socialist' investing in a 401K with a stock aspect may become a part owner of Berkshire-Hathaway, which is a publicly listed firm.
This is where the distinction is important IMHO. Simply owning some small part of a company or a house or a car doesn't make you a capitalist (given the distinction). You must own enough capital where you can profit without exchanging your time and labor for money. So, I may own my house and my car and even have some money in the bank... but if I need to go to work in the morning in order to pay for my mortgage, the car loan and my meals... then I'm not a capitalist (even if I subscribe to the ideal).
By your definition, almost nobody is a capitalist as most firms are publicly listed and hence socially owned.
Correct. By the definition I've chosen to adopt, very few people are truly capitalists. I would say you need at a bare minimum of 1/2 million dollars without having any debt in order to remotely qualify as a capitalist in my world. Relatively speaking, not many people have this kind of money. Most people need to trade their time and labor in order to pay for the things that they require to live. I.E. the interest from their investments alone is not enough to survive. Naturally, I'm not a final authority by any means so feel free to disagree.
In short, I think the reason the distinction has blurred in usage is because it has genuinely blurred in reality.
The above is a good point, and I won't argue either way. I think it may just be a matter of how deep we want the analysis to be. My point was simply that if we choose to re-focus the blurred image we may become more enlightened.
And a socialist is certainly not the same thing as someone with no money.
Again, I don't remember making this claim. If anything, I wanted some people to consider the possibility that (after some critical thought) what works best for them may actually be socialism, not capitalism. By no means do I think it should become a holy war. After all, we are each entitled to our own beliefs. Invoking the critical thought process is what I believe to be truly important.
I'll check it out, thanks for the recommendation ;-)