I have to say, as a developer, and a system administrator, I like setuptools. It does what I need. Could it be better? Sure. For what I use python for on a day-to-day basis it makes my life a thousand times better than it was before setuptools. Nothing ruins your day more than spending *hours* tracing down package dependencies just to get the *one* package you need to allow you to perform some crucial task. It's even worse when you have to do it on multiple architectures.
Perl's package location and installation system (CPAN) is one of the primary facts contributing to its success. Perl is a pig. It's a charming pig that can do lots of tricks, but a pig none the less. What makes it shine is CPAN. And here's the catch: CPAN isn't really any better than setuptools. It's got warts and nuts all over the place, but it works.
Without setuptools a lot of people wouldn't be using python. Easily installing packages is critical to the success of a language, and setuptools fills that role admirably.
[ I think what we really need to focus on as a community is binary generation generation. There are several tools out there that work for different platforms, but nothing that, well, just works everywhere. I'd far rather have one of those, than bicker over a perfectly functional setuptools. ]