Simplify logic at the top of setup.py

In #1180, @mdboom updated ``distribute_setup.py`` to a more recent version, and I think that we can consider simplifying what's at the top of ``setup.py`` which I *think* was intended to avoid downloading distribute if it was already installed. The reason we have the logic at the top is because of #640. But now that ``setuptools`` 0.7 is the latest version, is this logic still needed?

@iguananaut - this is a question for you since you wrote that logic in the first place :)