Good news! It doesn't look like the picture. Something is very wrong with that picture; either he intentionally took it badly or his camera has issues.
The bigger issue is think about how close you would have to hold the watch up to your face to make it that big in real life. If you did that you'd be able to see the pixels but you wouldn't hold it that close.
http://www.hodinkee.com/blog/hodinkee-apple-watch-review has much better real life shots that mirror what I saw at the Apple store.