The whole entry points method of discovering template engines appears to be outdated. I discovered this first when attempting to add jinja2 support. See https://github.com/mitsuhiko/jinja2/pull/109 and the associated issue.
I looked into the TurboGears2 source and they don't appear to be using the entry points method anymore either. We could try just copying their code. Supporting Jinja2 is a blocker for solid Flask integration.