my approach was similar to yours...i played internet poker for about a year and a half, cashed out a profit of about $500 playing $1/$2 limit...and then picked it back up again beginning of november.

I deposited $50 first week of november and immediately started playing $.50/$1 limit, i know i didn't have the bankroll for it but I played the game before and felt confident enough in my abilities. I ran it up to $200 in a couple of days and jumped to $1/$2 limit, and i've been playing at that limit ever since.

So far:
$1/$2 limit (6max exclusively)

22,403 hands
won: $2,089.22 since first week of november
4.55 BB/100 hands win rate.

i understand how risky my approach is, but i think the important thing is comfort, if you feel comfortable playing at a level, why not play it? it's just the same as when you play live...i'm sure people dont bring $500 just to sit in at a $1/$2 limit game in Vegas. Micro limits are brutal, as you noticed and there are PLENTY of fish at the $1/$2 level.
i haven't built a good bankroll to jump to $2/$4 yet though lol, i keep cashing out profit to spend on other things...i'm still in college so i got other expenses to keep in mind.
I keep at least $400 at all times, (most of the time $500 unless i'm on a losing streak) i know its not the 200 BB recommended roll, but i feel comfortable enough with it.

of course, this was with the aide of PokerTracker and PokerAce HUD.