Looking forward to the inevitable outcry on this forum once the EU competition commissioner levies another fine on Apple worth a day's profits...
It's completely do-able and Spotify has the capability to do it, now and in the recent past.
But a lot of times the decision to buy a watch is fashion-driven rather than utility-driven, and depending on what city you live in, either high-tech fitness watches are everywhere, or anything other than an Apple Watch gets you a dirty look.
Saving songs is spotty too, some of the "saved" songs on my phone don't actually have the data and won't play when I'm offline. I can't figure out how to force them to redownload short of maybe uninstalling the app, so sucks to be me I guess. Spotify's mobile app is so bad that I'm constantly reconsidering my subscription. I'd go so far as to say that being able to explore new artists and save their discography for later when I'm commuting is a meaningful improvement to my quality of life, but Spotify has managed to make the experience so shitty that I usually just turn on the radio instead.
https://buy.garmin.com/en-US/US/p/603229
It's the only watch (or was at the time) that has an independent Spotify app.
Spotify issued a cease and desist within days. I still have it installed on my phone and watch - it's a long way short of perfect (when it loses its connection it hangs and there's no easy way to reset it) - but it does work.
So it's not Apple stopping the release of this functionality.
I assume this is all tied up with their campaign about unfair treatment on the App Store, but it still makes little sense to me. Apollo was written by a single developer in their spare time, it works (although not perfectly - still good given it's a 1.0 and they were working alone with no support) and has been released for almost a year.
If I can’t actually cache my raw media files onto the watch directly and play using any watch-only player app I want, then it’s unusable. Any solution that requires streaming or tethering is a total non-solution.