The watch bands, like all accessories Apple sells, are premium priced. I think, aside from just looking to maximize profits, also helps to create areas where third parties can jump in & create lower-priced products. And the more third parties you have invested in the success of your product, the better off you are. Apple could easily sell a $10 watch band, but then there wouldn't be any incentive for third parties to come out with $10 bands. It's the same reason why Apple doesn't sell $10 iPhone chargers, or even really update their 'Office' apps. They needed to have them on the iPad at first to make the iPads viable for mobile workers, but what they really wanted was Microsoft to port office, so that now Microsoft is also invested in growing the iPad market. Microsoft is happy because you need Office 365 to use the iPad version (for anything about 10").
The third parties are happy to get a slice of the Apple Watch band market, and Apple is happy to know that every time they sell a watch band, they are likely making a profit of somewhere around $40 (assuming its sold directly by Apple), and if one is sold for less, that it's helping another company expand the Apple Watch market.