I think the issue is 2 fold.
1. Custom Watch faces is too insignificant / small market for apple to invest time and money into making a full fledged AppStore on it own.
Totally disagree with this. They once thought the market was too small and insignificant to have third party apps. By Jobs own admission, Apple were surprised at the explosion of the AppStore.
People will spend ungodly amounts of money on terrible apps. The idea of a FaceStore that has thousands of Watch Faces at 99p is a potential goldmine. If they set a minimum price of 99p, they take a third (iirc) of the profit. Man, imagine the potential money there. The Apple Watch is the most popular watch in the world (apparently). That is a market.
The policing of copyrighted content may be an issue, but that exists in the standard AppStore too.