just a humble lurker, but it seems like there's a bit of conflation going on with the concept of "upgrading." on the one hand, there's upgrading within a collection; i think the analogy to art here rings fairly true. i know the pepsi bezeled seiko 5 that will join my PAM when my new job kicks in will mean a lot to me for a long time in the face of potential "upgrades," even as i can (and do, and will...) drool over the beautiful shots of GMT's that pop up in this thread until my girlfriend elbows me for dereliction of attention.
but as for upgrades in the production process, the engineering or functional aspect of the watch industry seems important in a way that doesn't sit perfectly with the art industry. part of the charm of the hobby, at least reviewing its development over time, are silly things like complications arms races and rolex sending watches deeper than humans have any right to expect to survive underwater. there is an element of quantification that is a bit easier to track over time with watches than it is with art, and for better or worse (maybe just for ad-speak) the lore tends to follow this progressive technological narrative for watches.
in other words, premises (1)-(5) stand with respect to a watch's place within a given fan's collection; but with respect to the production of watches and their subtle (or not so subtle) changes over time, not quite so. it seems right that high-end watches fit the paradigm of premises (A)-(D) relative to other means of telling time (cell phones i guess?), but there's enough wiggle room between a given high-end watch "X" and another "Y" such that preferences between high end watches may arise along practicality or functional considerations. "upgrade" seems like an appropriate term for this... even if it seems a bit cold in the collection context. jmho