The difference being that you can choose your band entirely dependent on look or feel and don't have to worry about losing functionality. If I don't like how the Pebble NFC-enabling band looks then tough shit -- I have to wear it if I want to use NFC. If I stop off for a smoothie after a workout, I can still pay using NFC without changing from the fitness band to the NFC band. How much am I paying for these bands, and at what point is it just cheaper/smarter to buy Android Wear or Apple Watch instead of mix n' match FrankenPebble?
"What functionality are you considering absolutely definitive to Smart Watches that the Pebble watches don't support?" I feel like I've detailed it pretty well here, and it's not one definitive feature it's just the cumulative effect of all the areas the Pebble is deficient in -- display quality, interface, UI, integrated health/NFC sensor, voice/Siri integration, touchscreen, etc. At the end of the day the comparison between Pebble and its competitors is going to look a lot like eReader versus tablet, pager versus cell phone, or PDA versus cell phone. If it 12 months time you asked someone "Is Pebble a smartwatch?" someone may say yes or they no, but it won't even be in their mind as a part of that product category. It will be its own thing.
Well yes, the larger you make the text the better it's going to look if you are doing with a really low-resolution display. But smaller text is going to be necessary for longer notifications and messages. My point is more that it's a stretch to say that "Text looks fabulous on my Kindle, therefore it will look fabulous on my e-Ink watch!" I don't know enough about the tech to speak authoritatively on the Pebble's issues with text, but we can both agree that the text is not even close to Kindle-quality, and looks worse as you scale it down in size.