I can see their point, sort of
Allowing 3rd-party apps to take over the core function of the watch would take the design experience away from Apple, and I can see how they wouldn't want that.
More importantly however, I wouldn't WANT a 3rd-party app as the core function of my device. Most apps on the App Store are very scammy, to put it lightly. I don't think Apple wants it's product tarnished by reports of apps popping up on your watch for the latest candy crush or medieval raid game. Or to be tracked.