This is a step toward my preferred setup (I hope). No Microsoft, there is no one device fits all model. And no, Tim, we don't need 4 devices.
For me, the best would be a wearable with LTE, messaging, accurate GPS, runner's health tracking, electronic payments, good map and transportation apps and a full suite of audio and video apps, together with a keyboard based, 15" super-light, super-powerful laptop for full real productivity. I don't need an iPhone, I don't need an iPad and I sure as heck don't need AR.
I would think a strong majority of us would prefer a system like this. I feel like a certain former chief, RIP, would have made it available by now.
I understand what your Apple utopia looks like, but I don't think Apple is going to design an LTE-capable Apple Watch to be an iPhone replacement. I'm sorry to burst your bubble. There are just too many things standing in the way of that becoming a possibility anytime soon.
For starters, texting on a 38mm or 42mm screen sucks. Dictation, you say? Well, that works up to a point but who wants to be dictating most or all of their text messages -- particularly all the time when they're out in public? I certainly don't.
Then there are phone calls. If the Apple Watch was an iPhone replacement, that would mean you'd have to wear bluetooth headphones/earbuds to take calls; or, I guess you could choose to be one of "those" people that walks around in public talking on a speakerphone. Personally, I'd rather just have a normal phone handset.