You are expressing a common thought but it is pretty narrow.
You appear to be assuming that the primary reason for producing a 2nd Gen Apple Watch is to get current AW1 owners to replace their AW with an AW2.
There are MANY people who DON'T own an AW. Reality is, if Apple wants to grow their sales they will need to produce something that will entice those currently-not-owning-AW people. Yes, there may be some who have been sitting on the fence regarding the AW1 who will buy, but that can go only so far. This is the fundamental reason why Apple improves their products and produces multiple generations of them. Why should Apple take a "one and done" approach with the AW (or wait "x" years before making any improvements)?
You said, "tech hasn't evolved much at all since last year". How do you know what Apple's engineers have been working on? It is quite possible that there have been improvements made to the sensors, scale of components, and breakthroughs/optimizations. What does Apple do with those things? They can slip-stream them into the current AW production without ever announcing a formal "generation" bump, formally announce a new generation, or do nothing with those improvements.
I get the feeling that most of the resistance to Apple producing an improved version of the AW is rooted in current owners not wanting to own "last generation's" model. (I'm not saying that this is YOUR motivation, I don't even know if you own an AW, or that it is a feeling of the majority of current AW owners, but it seems to be the general "feel")
For me, if the AW was more of an "iPod Nano 6th Gen on steroids" (I currently use that on occasion as my watch), I would've been all over it. But as it stands, I'm waiting to see what AW2 brings, when it brings it.