You are right, you could literally get a timex with a simple face and a nice brown or black leather band, faux leather, faux croc, whatever as long as it had clean lines and it would compliment a regular suit.
here is a $65 timex:
https://www.timex.com/gp/product/B0...&m=A1S5XB33AHYRMX&n=238500011&timexBrand=core
here is a roughly $1890 Baum and Mercier square:
https://www.baume-and-mercier.com/collection/en/Hampton/Square-8677
Not that different (at least on the outside) are they?
I don't think people have "convinced" themselves of anything necessarily however, a fine watch is a keepsake and an investment and sometimes a marvel of design and construction that makes them attractive and collectible. As for clothes lets not kid ourselves, I can go into Macy's or JC Penneys and come out with a decent outfit but it likely wont last, wont fit as well as it could and wont satisfy my appreciation of things finely made with care and with quality materials that I can also wear and enjoy.
I am a devoted bargain hunter with a closet bursting with clothes I couldn't have afforded at full retail, some of them are hand made, many are of materials you will never find in a box story some are even used but so fine and so durable it doesn't even matter. At the same time I have a pair of levis and a drawer filled with half dead concert t-shirts I cant live without.
This isn't about snobbery or buying the most expensive labels, I view my clothes more as a collection than a wardrobe half the time, I am just into all thing sartorial among other interests.
p.s. My Alden loafers will outlast my by a good 20 years I have no doubt, now how "expensive" are they?