W.T.
First of all, we have a 2 1/2 year old and 9 month old and aren't there yet, but we've talked about it a lot.
We use first names for adults that are friends and a Mrs/Mr, etc for acquaintances or elderly people.
I think please and thank you are so important, as are acknowledging people with a smile and a hello and goodbye. My son is already learning early on that a lot of people just aren't polite or nice. He will say hi to people he passes in a doorway and they ignore him. I say things like, "I like how you said 'hello', but not everyone is as nice as you are (or polite, etc).
We do lots of things by example at this age: letting people go through a doorway first, asking for things instead of demanding them. Using polite words that make people want to help us.
I personally don't believe in sir or ma'am, but we are in Southern California and you just don't hear that! :) Unless someone is in the military or southern!
I do think lots of times people are busy with their lives and so aren't polite, but I think a lot of people just aren't polite.
I'm not Miss Manners, but I do think manners go a long way in helping create a civilized society, so I am right there with you!