distutils being built into the stdlib means that it's not very easy to improve the tooling by improving that module, since it's tied to the Python release and people can't depend on a new python release for many years.

setuptools isn't tied to the stdlib, though it had many problems and still does. A large portion of what was holding back improvements was that there was nobody really pushing through all the political nonsense surrounding the tooling, and there was nobody to say Yes/No when a consensus couldn't be reached. For normal featured there was the PEP process, but the PEP process didn't work for a long time for packaging because Guido admits he really doesn't care much about packaging at all. Now that we have BDFL-Delegates in the form of Nick Coghlan and Richard Jones and we have people willing to push through changes even when it takes a lot of pain to argue the points we're finally seeing the engine of progress start to grind to start.