Confirm that I was weak - set vs. rivered 3rd flush card

[usmfan]

5/10 6 max
Villain is ~50% VPIP and somewhat passive.
Villain is UTG+1, Hero is CO with KcKd
1 limp, Villain limps, Hero raises, Button & SB fold
BB & limper call, Villain re-raises, Hero caps, 3 calls
pot = 8BB
flop is Jd, Kh, 8d
checked to Hero who bets, folded to Villain who calls
Turn is 2c, 9BB
Villain checks, Hero bets, Villain calls
River is Qd, 10BB
Villain checks, Hero checks (???WTF??)

This seems standard wuss play. How horrible is this? I hate folding to a river c/r. Do I 3 bet the river and fold to a cap? That seems impossible.