a few things here:
1) as you know, "pip wheel" needs setuptools too, so just overtly stating this has to change for that
2) I think each pip version should set a setuptools requirement (based on our testing), not just "setuptools"
3) If setuptools is installed and doesn't meet the requirement, I think we should prompt them for what they want to do.   "Proceed at risk, or Allow pip to re-install".  they could set the permanent answer in their config or environment.