Not really sure why you're basing you're argument off the $1,000 SS Watch when at that point you're just spending money on the higher quality materials, but can get the same functionality from the sport model for $350, but ok. Anyways, I've had no problems telling the time with my watch. It shows the time for me maybe 19 out of 20 times which is more than enough for me and for the times that it doesn't, a light tap on the display will show the time. Does your watch not do this? Even slight glances at my watch turn it on for me.
Everything I've done with the watch has worked perfectly for me. Using it as a silent alarm is awesome, notifications and subsequently acting on those notifications, works perfectly as well. Similarly, dictating message replies is significantly better than it is using Siri on my phone. Answering phone calls when my hands have been full has been surprisingly convenient (I actually thought this was gonna be a dumb feature, but it's quickly becoming very useful). I've used a few third party apps and while they're a bit slow (really not as slow as reviews made them out to be), they also don't seem very useful. Many apps are just better to use on the phone and I get the feeling that developers don't really know how to design for the watch at the moment causing their apps to either do too little or do way too much. The only apps I've stuck to using are Things and Calcbot.
For working out the watch isn't a necessity. Not in the slightest. The thing is, it doesn't have to be. During my workout yesterday it made it more interesting and fun. Seeing my stats, time, calories burned, heart rate, and setting/beating goals for myself during the workout made it genuinely motivating to work harder and take shorter rest times between my sets in order to achieve those goals. The same goes for seeing my daily activity goals and completing each ring; seeing the rings fill up throughout the day yesterday and today is an interesting and fun stat to be able to quickly look at.
Lastly, the battery has been significantly better than I anticipated. It made it through the whole day yesterday with plenty to spare even under heavy usage (constant demo's to friends along with me playing with it and customizing watch faces and settings) and by the looks of it it'll be doing even better today.
So yes, for a first gen product I'd say it's pretty incredible. Everything I've wanted it to do, it does well. And the things I didn't think would be useful at all (phone calls, working out with it, setting workout/activity goals) turned out to be a lot more fun/convenient/useful than I thought. Obviously there are bugs here and there, I'm not saying the watch is perfect -- it's not, but for a first gen product you can tell a lot of thought and effort went into it. In the end, this is just my opinion.
