Stainless steel is easy to remove scratches from. Sure it takes a bit off, but thats like the sun giving off a bit of energy: it would take a very long time of constant buffing to start making a visible difference.
I bet you could polish up every few weeks and you'd be fine for the lifespan of this watch, which let's face it, is going to be 2 to 3 years max... 4 if you REALLY push it. We aren't talking about a Rolex or something that you're going to pass down to your kids.
And on the other hand, when you do inevitably get a ding or scratch on your space gray, you will not even have the option of buffing it or fixing it.
When I bought my watch, I intended to return it within 14 days as I just wanted to play with it. Trying it on in the store, I must say the SS looked way better. I ended up keeping the watch and I am glad I went for the SS.
Here's why its worth the extra $200 to me:
1. Never have to worry about scratches on the screen and don't have to wear an ugly screen protector.
2. Looks fantastic with about 95% of bands out there, versus the space gray which looks pretty bad with almost every band except leather and sports. For that matter, SS will also match more jewelry that you may wear. I personally don't but it could be important if someone wears a metal ring or silver necklace, etc.
3. Would not be embarrassed to wear it to a fancy place. Looks more like jewelry than a gadget versus the sports which definitely looks like a gadget. Actually makes me proud to wear one.
4. I do have the option to buff out any scratches, which means in 1, 2, or 3 years I can make sure it looks brand new should something happen to it.