It's true that this is problematic for packages that don't have wheels, but flit and click are both pure python packages with wheels available, so I don't think there's any problem here in practice. (In fact flit currently uses flit as its build system, and depends on at least one other package that uses flit as its build system.)
I thought the big problem with setuptools unvendoring was that we don't currently have isolation for build requirements, so there was interference between what setuptools wanted and what other packages wanted? PEP 517 doesn't have that problem because build backends are installed into their own little quasi-virtualenv. Or am I wrong?