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.
Pay) haven't caught on: focus on product line & corporate interest instead of user experience. For starters - and enough right there - 3D TVs were implemented using stupidly expensive product-specific glasses (company-specific shutters), rather than cheap universal ones (simple polarization). While the problem bugged me early on, it was slammed home when I walked into a showroom where the demo glasses had been shattered, making the 3D-ism not just unusable but EXPENSIVE to fix ... screw that, I'll just watch it in 2D. If I could just go see a 3D movie in the cinema and take the glasses home to use with the TV, or just order more from Amazon for $5 each, problem solved ... but no, Sony et al had to opt for brand-specific complicated battery-powered breakable >$50/each glasses (idiots).