Over the time reps have increasingly become better as the rep market grows in size. I don't see the quality and technology of rep makers decreasing, rather the opposite. But I also get that it's not worth it for the manufacturers to copy every little detail 1:1.
Imagine a hypothetical scenario, where all the most popular watches (Submariner, DJ, Royal Oak, 5711...) were repped to such an extend, were it would not be possible, to tell for certain through the watch alone it wasn't real. Of course the watch may still be authenticated through paperwork and the AD who sold it.
It's highly likely that the reps would still be cheaper (smaller profit margins, no R&D and advertisement costs, less management cost..). Do you think the broader watch market would just collapse on the demand side? Or do you think the value of genuine watches would be shifted more on the artificial side (similar to paintings).
I suspect we'd see an escalation in anti-counterfeiting technology, much like we see in currency.
To date, with a few minor exceptions, the chief anti-counterfeiting technology has been simply the difficulty of building something to that level of precision, finish, and design, but you're right, the end of that may be coming soon.
The watch industry has faced that before and done some measures against it, first physical records, like certificates and serial numbers, then difficult to replicate features, like Rolex's microprinting and micro laser engraving in the crystal, or their more recent rehaut engraving.
These measures largely rely on capital cost. The equipment to do them is expensive, but the cost per marking is small, so it makes it difficult to fake. But, tools and methods get cheaper all the time, and fakes are a big enough business to buy even expensive equipment.
Luxury brands have been working on this for a while. I did some work for a luxury brand group, which will remain nameless, nearly 15 years ago to produce some concepts and prototypes for authentication tech. I won't go into the details, since I'm still contracturally obligated to not, but there are ways to embed codes into physical objects that are easy to scan for, if you know how they're encoded, but nearly impossible to detect if you don't. Not being able to even detect the security feature makes it pretty difficult to replicate it.
I expect things like this will become commonplace, and part of a brand's value in the future will be how good their authentication tech is. The end consumer will have assurance that their item is the real deal, in seconds, just by stopping by any brand boutique and having it scanned. This could be combined with more visible markings or detectable codes, plus secure databases, etc., which, while not as counterfeit proof, can let the customers scan their item with their phone and get a positive hit, with return of their registered name, or code phrase, or whatever, from the company's servers on a phone app, enabling the all-important "see, I told you it was real" bragging rights in social settings.