Rerunning setup worked. But was giving me an error that it already existed. I clicked the button to replace it, and it wouldn't clear the error.
So then I deleted my .htaccess, and it gave me an error that it was missing. So I clicked the button to copy and it wouldn't clear the error.
Finally, I ran `touch .htaccess` and `chmod 777 .htaccess` and it worked.
Not sure why your setup wasn't able to do that for me, either permissions or a bug, but I'm all set now it looks like.
(and yes, you're right, a dramatically smaller .htaccess file in 1.4.5)