I think you answered your own question there. Men have few accessories that are considered acceptable by the mainstream. Like women that may collect purses, shoes, or other jewelry as fashionable accessories, men buy watches. As others have stated, they are somewhat like cars in that watches are a statement piece.
As you said spending more money on a guitar up to a point gets you a better sound. The same is said for watches. Spending more money on a better movement is more accurate up to a point so one wouldn't have to adjust as frequently.
Personally, I don't normally wear a watch. However, I have a 1904 Elgin pocketwatch that cost me more to restore than it is worth. It's something that connects me to my grandfather and it serves a semi practical purpose if I ever want to know the time, provided I remembered to wind it up.
I get what you're saying, but it just isn't comparable in terms of real world use. I can buy a shitty digital watch that will tell time just as well. Will it be accurate to the second at all times? Probably not but, really? In practical use, it's the same thing. And, if you're the type that needs an expensive timepiece to "make a statement," the statement I'm receiving is "sucker."
I understand having a family heirloom, or something else with sentimental value, but that isn't really what I'm referring to.