The idiocy is focusing on slim devices. Just make them a bit thicker if the chips/circuits don't fit otherwise (and increase battery life while at it).
And yeah this was more of a ramble, not directed at your post. But I agree. I already have an Amazfit Bip (~€60) with a 3-4 week battery life that I use solely to get notifications on my wrist instead of having to pick up my phone. A watch is completely usable for anything else than a passive reading device though (at least until speech-to-text or (some kind of) gestures makes leaps forward). If as you say the devices were more interconnected (Chromecast is a step in this direction, connecting screens/TV's) the form factor of one specific becomes less important.
But, since we don't have this now, why not give the consumer a choice? My main gripe is that everything is in the 5-6 range whereas a little while back (2-3 years?) you could find a broad range of smartphones between 4-6 inches. It's gone from 100/0 in <4" vs >4" to 0/100. I would be fine to even have 20/80.
/rant