For me, yeah, that's way too close to your hand. I've never, ever seen someone wear any kind of watch right up against their hand like that until the Apple Watch. Seems to me like it would be so uncomfortable.
I'm wondering if people who haven't been traditional daily watch-wearers until the Apple watch are wearing it that way because they don't know any different? Because a traditional watch is typically worn to the left of that bumpy little wrist bone...at least in my personal experience of seeing those around me wear watches all my life. I could be wrong, but that's always been my "norm".