The watch can and should, for most of us, eliminate passcodes altogether on iPhones, and Macs and, if Apple’s smart, PCs: As long as my watch is in range, let me in! That, to me, would be the single-most compelling feature a smartwatch could offer: If the watch did nothing but release me from having to enter my passcode/password 10 to 20 times a day, I would buy it.
Using 1Password means that I only need to remember my master password but I still need to type it too many times a day (and it is long to type it with a virtual keyboard).
Such a watch would be a good idea. I have stopped wearing a watch a few years ago since I always have near me a mobile phone that provides the same functionalities. I would not buy a watch just for this feature but I would definitely buy a small gadget that I could attach to my keyring (like the RSA security token I used to have to connect to my company VPN).