Have you been a watch shop lately? $200 is not expensive. You can spend a lot more just for the right brand name. The iWatch won't be toy, it will be a serious bit of kit.
Agreed. $200 is not 'expensive' at all for something that will eventually be recognized as a wearable "personal computer". The iPhone is, for the most part, a personal computer. Even the near-obsolete iPhone 4 of today is a MUCH more powerful computing device than some of the old IBM mainframes used during the Cold War era.
Give it a few years, and the iWatch will eventually evolve into a "personal mini-computer" that can do many of the tasks (and maybe more) that a 2005-era iMac or an iPhone 4 could have done.
"iWatch, print my most recent email message."
"iWatch, turn on the security alarm on my Lexus."
"iWatch, purchase/download the Jimmy Buffet album on my iTunes Store Wish List."
Apple's rabid obsession with "thin" devices is a prelude to even further miniaturization, thus leading the way to true personal wearable mini-computers imagined in Star Trek and The Jetsons.
At first I was also suspicious (annoyed) of Apple's obsession with "thinness". But eventually I realized what they are trying to do. Their goal is to pave the way or push the envelope in personal computing miniaturization.