The phone made sense up to a point—it has become more like a miniature book, and the changing form has reflected that.
The entire point of the watch is to free yourself from the screen of the phone for basic tasks. If the function of the watch hinges on the screen, then the phone is the better tool for that.
There was a time when Apple understood how the different parts of their ecosystem existed in their own lanes. Tim Cook has not seemed to grasp that one of their greatest strengths was that their devices weren’t designed to do absolutely everything, but rather a few targeted things very well.
That isn’t what they’re doing—it says in the article that the measurements are of case height, not screen size within the case. The body of the watch is bigger.