A Rolex is a lot more than $1000. I do think 40 million was a very unrealistic forecast, if the WSJ is correct. I'm not surprised that the gold watches didn't sell. That said, the Hermes is a good balance and is about the right price for a fashion-conscious person to splurge every couple of years or so. The $200 premium for the custom watch face is a bit much (especially now since WatchOS 6 adds square watch faces), but I would not be surprised to see the Hermes line continue. The bands are high quality, and Hermes gets good exposure.
Of course, the broader point is that Ive was the one pushing for the gold and ceramic designs. And undoubtedly he pushed the 12" MacBook, butterfly keyboard and the switch to all USB-C, all of which were controversial.