I suspect since they are offering the send out first service they are having to do something to cover the costs of "new" or "like new" products. You would go ballistic if you sent in the gold Edition in perfect cosmetic condition but had dropped it in a pool and wanted to repaired by using the express method and received your "repaired" watch with some scratches and nicks in the gold housing. So the outsides have to be pretty much flawless, or at least damn near it (maybe apple will polish and cleanup the surface so at a microscopic level they aren't "new" but visually they're new). Ok, so that's great, a spotless watch returned for a spotless watch. But what happens if you scratched it a couple times and then accidentally dropped it in the pool. Ya, it sucks your gold housing got scratched, but you like your watch and want the water damage repaired so you use the express option. Apple sends out a basically new watch and you return a repairable water damaged watch BUT it has cosmetic flaws, maybe to the point where a polish won't fix it. Apple probably can recycle the gold and integrate it back into the system but there's going to be some sizeable costs with that. Hence the pretty steep fees. I also suspect most in store repairs will be an apple rep discussing the issue with you, looking at the watch, "checking off" on the repair and then giving you a "new" watch to walk out with.
Maybe some iPhone users with AppleCare+ that have cracked screens can weigh in on if they've had to leave the phone with Apple for a full day while they replace the screen in house. I know they shifted a lot of repair work to the stores but in my experience they still swap out the phone for a hassle free 5 to 10 minute experience for the customer if it's under warranty or AppleCare+.
(Also, I LOVE the idea of the Express mail service. I would love that on iPhone. I've had to have a few over the years replaced for different reasons and always had to drive 120 miles away to an Apple Store (made a day trip of it) since I didn't want to be without my phone for 5 days or something if I opted to mail it to them and THEN they repair/ship or just ship a replacement)