Agree with you entirely.
Upgrades will come in software, not hardware. The only hardware being regularly upgraded will be the iPhone it connects to. It's going to be the same business model as the Nest thermostat: I fitted mine years ago and have had numerous free software upgrades since. There's been one thinner model released since, but it is functionally equivalent. It looks much the same as the original and it even uses the same name as the device it replaces. It's simply a Nest, not a Nest 2 or a NEST-s
And like the nest thermostat, this tear down report suggests that the watch has been deliberately over engineered for longevity. We'll see its hardware features
gradually unleashed by software:
https://www.abiresearch.com/press/apple-watch-insides-pcb-details-revealed-for-the-f/
That said, I'd anticipate periodic "face lifts" to the outer casings, but they'll be limited to different colors (I think there's already a thread speculating on this) and different materials/finishes with bands to match. The physical dimensions and technical specs will remain constant, however, to protect the buyers' investment. Doing otherwise would completely undermine the credibility of the watch with the masses of existing and potential customers.
How long's the shuffle been going with essentially just color changes?