That's exactly what I thought when I first saw it explained. Coming from the iPod and all this touch sensitive stuff (and then the "hard tap" being introduced here) a physical thingamabob to fiddle with seems really odd.
Touchscreen tech has advanced quite a bit since the old days.
The demos of the watch show a mixed use-case. The crown for some things, the screen to complete the task. So unless they're supporting similar screen tech as what Samsung is featuring now, the glove use-case doesn't matter.
Before you continue on your criticism of the digital crown as an input method, why not actually try it?
I don't buy the false input argument. Smartphones already handle that pretty well but in the case of a watch I can additionally see people using their thumb on the base or the other side of the watch as an anchor to steady their hand before committing to swipe or a press gesture.
As I said before, though: all my opinions are subject to change.
I think Apple messed up here. I might be proven wrong after millions of people are joyfully spinning their little digital crowns between their thumb and forefinger a couple of years from now, but I would wager a small sum that I'm not wrong.
Would it not have been better to put a touch-sensitive pad along the whole side of the Apple Watch and/or give it the same pressure sensitivity as the front screen? Or if they chose a circular watch, give it a spinning band around the whole face of the watch. Much bigger controller, much more comfortable and better precision.
Perhaps there's some use case where the digital crown is a preferable method of input (setting a very exact numerical value for example), but I have a feeling those use-cases will be few and far between, and even then, the set-up to use the crown will require some form of touch and/or voice input.