I too have been rather baffled by it, trying to determine what exactly the angle is for the Watch. With the iPhone and iPad, the announcements had some idea regarding what Apple thought they'd be used for. The iPhone was an iPod, a phone, and an internet browser/email client in one. The iPad was something between a laptop and a smartphone that was meant to be better than either at certain tasks. The Watch is just... this thing that sits on your wrists and tells you when you have messages and calls and tracks your heartrate and whatnot. They don't seem to have a clear message for it.
The only angle that makes sense to me is that Apple knows the Watch isn't essential to everyone in the same way a smartphone is so essential. It doesn't do anything your phone doesn't do (except admittedly fitness tracking), it just makes doing some of those things quicker and easier and more frictionless. The Watch is a nice-to-have, not a must-have - in other words, it's a luxury. And that falls in line as well with the prices of the steel and gold models, the existence of the gold models in the first place, the ridiculously high-precision manufacturing processes they're using on things like the link bracelet (9 hours to cut the links for a single band, fucking Christ). It's a non-essential luxury accessory and the whole thing is designed and priced that way.