Glucose testing is definitely POSSIBLE. It's also further away than people think.
Here's the state of the art:
http://www.darkdaily.com/princeton-...hat-uses-imaging-technology-119#axzz3xAPNRUa1
The essential component is the quantum cascade laser and, right now, those cost about $1000 each. This could (in PRINCIPLE) change, but getting from here to their requires a whole bunch of tricky business issues to be negotiated. (Essentially you have to convert from making these lasers as specialized devices, using general purpose fab techniques and lots of human input to fully-automated manufacturing. That means someone taking a gamble on building a $50 million or more facility on the promise that if you build it, they will come. [ie there will now exist a market for the 10 million a year QCLs you fabricate as opposed to the current market of maybe 10,000 a year.
That's a hell of a gamble.])
Of course, even apart from cost issues there are other challenges. There is packaging for example. QCLs are small, but the standard packaging schemes in use today are not small compared to the size of something like a watch. There are basic mounting issues --- the work I described tests against the palm, not the top of the wrist, and are there unexpected challenges to using the top of the wrist (like hair, or body motion)?
Before we see this in watches, look for it in hospital equipment (it's not there yet...) then in dedicated home equipment, and at that point it might make sense to consider shrinking it into a watch.