I don't think the "downloaded an egg and ran setup.py" part is right. Eggs shouldn't have a setup.py, they're binaries that you just unpack into site-packages.

I also got the impression that setuptools introduced the egg format and easy_install around the same time.

But other than that I think you are generally correct — PyPI and Vaults of Parnassus were just links to websites that had the packages on them originally.