My wife thinks that even the smallest latest Apple Watch is way too large for a watch. I wonder if there's some matter of comfort in a relatively flat backed round form factor for a watch? A relatively thick rectangle with a rounder back is going to have a center of mass that is further away from the wrist. It comprises a very small cantilever, which is still quite large on the scales of the traditional watch. (By something like a factor of 3 or so.) The slightly taller rectangular shape will also tend to funnel the motion such a cantilever experiences in an arc parallel to the forearm. None of this was at all an issue for most traditional watches, simply because they were much flatter.
Something has always bothered me about Apple Watches when trying them out in the store, and I think it's this. They're not bulky, but there's something about them which seems to keep them from disappearing from my awareness. Even my dad's old Rolex, which isn't huge, but isn't small for a watch, seems to sit on my wrist more comfortably. Even the Tag Heuer, which I think is a bit too big, seems to sit more comfortably on my wrist. Even the big old school watches just didn't have this stick-out-y character.