It took me a while to realize the convenience of paying $30 a month to not go home or use a payphone to make calls. I guess its just a thing you have to experience, maybe its legit, maybe not.
$30/month in 2002 was a lot of money for a grad student like me. If the Apple watch provides even a 5-10% efficiency gain in mobile device usage (by not having to unpocket their phone all the time), many will find it worth it, and once they are hooked, well, we won't be having this conversation anymore. For the record, I don't have an Apple watch, but I do see them selling very well where I live.
I've been to Basel World before, and the "I'm rich watches" start at around 40K CHF. And they aren't even very good watches given their mechanical movements, it has nothing at all to do with functionality or features.
They're comparing $30/month to a one-time payment of $500, so yes, that's reasonable.
Besides, if price is your argument, you should look beyond Apple anyway. Their devices mostly sell by branding. There are already smartwatches that are significantly cheaper than what Apple offer, and over time, the price difference between regular watches and smart watches is going to shrink further.
Even owned a Casio Databank.
So I don't get this first world problem of paying $500 for the convenience of not taking the phone out of the pocket.