oh, hold one, it is more complicated in fact :)

setuptools calls DistributionMetadata.dist.write_pkg_file()
method to write the .egg-info file.

This method make the assertion that the metadata fields are string
so it is not setuptools fault.

This code fail the same way:

dist = Distribution(attrs={'author': u'Mister Café'})
dist.metadata.write_pkg_file(file)

 
So I guess the patch needs to be done in
distutils.dist.DistributionMetadata, so it checks upon
the type of field before it runs:

file.write('Author: %s\n' % self.get_contact() ) 

That what I meant when I said that distutils should
decide wheter it works with unicode or str for this fields.

I can re-write a new patch if you agree on this