It will take off, but not in the way shown in the Google demo.
I am the owner of a Pebble Smart Watch, I've installed loads of apps for it, but the one killer feature I use is Notification Alerts.
Any time my phone alerts me about something I don't have to get the phone out of my pocket, I just check my watch and I can read the tweet, email(name, subject, first few lines), sms etc... I check my watch to see if I need to get my phone out. Anything that appears in the drop down at the top of your phone appears on your watch.
And that is it, that alone that makes the watch worth it. Yeah I have all these crazy other apps that tell me the weather etc. but they are just gimmicks and get used very rarely.
I am absolutely convinced this is the future for our mobiles, it is extremely useful, my wife even wants one which says to me this is mainstream. She says they are too manly though. As soon as the first Marc Jacobs/Gucci Smart Watch comes out this will be the next fashion accessory every women wants.