Its so hard isn't it - I think we're conditioned from a very young age not to question authority figures. I'm not convinced its always a good thing. It does sound like with a more patient MW things might have turned out differentl and at least you know you can birth a baby :). You might find some of the links on the No urge to push thread interesting, especially the one on the "10cm rule posted by smilehomebirth on Wed 06-Oct-10 at 19:52:25.
Things I found that helped me remember that, actually, it was my decision what happened were to not be afraid to ask questions (or get DH to), to "remember to use my BRAINS:
What are the benefits?
What are the risks?
What are the alternatives?
What does my intuition say?
What happens if we do nothing?
Smile!"
and (finally 
) to memorise these phrases by Mary Cronk.
In particular I'd need a very good reason to agree to VE's - what they don't know can't hurt you 
Re. what makes waters burst, IMO - and this really is just a gut feel answer - every material has a breaking strain, amniotic sack included. Most natural materials are not completely uniform, such that some areas will be stronger and some will be weaker. During labour (latent phase included) the pressure on the amniotic sack will start to increase and, at some point, it will be sufficient to burst the sack.
Sometimes it might be because the baby kicks - either directly or just by creating an extra bit of pressure that tips things over the edge. Sometimes it might be a particularly strong contraction.
I wouldn't be surprised if there was also an element of the membranes getting weaker towards the end of pregnancy - possibly as a result of hormone changes, possibly just due to time.
How dramatically the waters go depends, I would guess, on exactly where the baby is and how big a "puncture" is made.
So all in all its probably a combination of factors, otherwise known as I haven't really got a clue :o