For years I ran without a watch and quite enjoyed it. Then I bought one only to use while timing mile repeats, which was very helpful. I only started wearing it consistently when I was doing more speed workouts and it became a necessity, but other than that I don't pay much attention to it, or I'll leave it at home for simple easy runs.
Watches can be very helpful in races when you are trying to hit specific goal times, mostly during longer races for me, but I'll admit that I try not to focus on my watch times too much. It was, however, a necessity in the marathon.
I am a proponent of leaving the watch off during anything under a 1/2 marathon and just focusing at running on the edge of your ability. I used to scold a friend of mine all the time who would complain about looking at his watch and getting scared because he was running too fast. The mind is a powerful muscle and I always wondered how much faster his finish time would have been if he left the watch in the car and just continued to run. The body should be your gauge, not your watch.
Ultimately, I think it's a matter of knowing when a watch will be helpful and when it's a distraction, or when it's an impetus and when it's a restriction. It always comes down to mental strength and overcoming percieved barriers.