I think Apple Pay could end up being the killer app that suddenly gives people a reason to buy a smart watch. Think how nice it would be to just wave your watch by a register rather than reaching for your wallet and locating a credit card. Your information will be much more secure, and payments could automatically be transferred onto a spreadsheet. Moms holding a kid would love something like this. Or just the vast number of people that don't use a check register now would suddenly have an automatic one. Expense reports, budgets and taxes would all become easier and instantaneous. If Apple Pay takes off, so will their watches.
That coupled with the more discrete way of checking texts and screening calls, I can see the allure, however a $200-$250 price tag would get so many more adopters.
I could see the Apple Play connection, but that will mostly be beneficial for people without the latest gen iPhones. It's not much more of a hassle to pull out your phone to pay, and it negates the extra device you have to wear all day.
I see the iWatch coming into its own, but it will be better with a year or two of iterating.