I don't understand so many things about this. You're right that this would be popular; I've read a lot of people making the same comment, but why?
A. Full Android watches with SIMs and everything have existed for years. If that's what you want why don't you have one already?
B. The whole point is to be able to to have a personal area network with a single control unit managing the experience across all of your contacted devices, not a series of independent devices each vying for your attention in a disjointed way. Think of the watch as an extension of your existing phone that you can access without having to pull the phone out of your pocket, enter your pin, find your app, and finally do an action. This also allows the watch to offload the heavy processing tasks to the powerful device you already have in your pocket 99% of the time. What good is having your phone, and a second, less powerful processor in your watch both running 100% of the operations in parallel?
Another question similar to the one you are asking is, why would people buy a tablet when their phone can already do everything and more than it can do.
If there was a choice between a pocket phone with an optional wrist device, or a wrist phone with an optional reading device, a lot of people would go for the smaller, highly mobile wrist phone.
It wouldn't interfere with mobility and it would be readily available.
Something else that may be bogus, but would probably factor into some people's decisions is that it would distance the RF source from reproductive organs.