This is a necessary step in the evolution of this device and form factor, just as the original iPhone, even with its many limitations and flaws served as the basis for essentially the entire smartphone ecosystem that we take for granted a mere seven years later.
This is not a device for everyone. It has many flaws. It has an overly large form factor (relatively speaking compared to where it will go).
But for some (many) this will fill specific needs. Whether motorcyclists or bicyclists to have navigation on their wrist, someone looking for a fashion accessory that can connect with their phone, those wanting the health-specific features, this device will have a solid niche fulfilling those criteria.
The next Apple Watch will be thinner, have better battery life, etc., eventually, much of the functionality still relegated to the iPhone will make its way onto the watch.
But the next watch wouldn't happen if there wasn't a market for the early adopters and developers who will make use of what we have *today*.