I have to agree that they are disconnected with the target market but strongly disagree with your last statement.
There is no possible situation where it is acceptable during a work meeting / class / meal / driving a car / social event to dig into your pocket, look at your crotch, smile, then dig into your pocket again and resume whatever you were doing before your leg vibrated. The phone experience will NEVER truely work socially. It is always a strong disturbance to you and those around you.
The only real solution is to make the interaction seamless, such as with a wearable. A 5 inch or 6 inch screen just is always going to be a social disturbance. And with an aging population (needs larger text) wanting more and more utility (needs more content per screen), we aren't going back to 4 inch screens. And we ceratainly aren't going to phones with the 3 inch or less screens that would be needed to make emails, texts, notifications, etc. seamless.
The problem though is with smartwatches requiring phones. Now you need a $500 watch AND a $500 phone. You need to carry two chargers around with you (unless Apple makes their next iPhone charge with a magnet too). You need to carry two bulky devices to the gym or while running that half-marathon discussed by Apple. Requiring the phone pretty much destroys the utility of the smartwatch. The negatives now outweigh the positives.
Give me a smartwatch with just enough brains to display notifications, and just enough battery life to turn on wi-fi once a minute for a brief moment to get new notifications. That is it. Nothing else. That would be a killer smartwatch. One item to carry with you. One item to charge. One quick glance to your wrist will let you know that your next meeting has been moved and no one else will be disturbed by you getting this notification. Email, texts, meeting updates, heart rate monitoring, etc, all just a quick socially-acceptable glance away.