I'm reminded of this tweet: "it's actually crazy we figured out how to grow real diamonds that are cheaper and better quality than the real thing and so many people are still like, no thanks the suffering is what makes it special."
I don’t love that tweet because it’s not the suffering, but the fact the diamonds were naturally grown in the Earth. Put another way: why would anyone buy sea salt when can we produce pure NaCl?
(This is not to say you can or should ignore the suffering caused by the diamond industry)
Sea salt is NOT pure NaCl; that's the whole point of eating sea salt! It has significant quantities of other minerals, such as calcium chloride and potassium sulphate. That's why sea salt tastes so different from regular table salt.
The reason people buy sea salt (made by evaporating seawater) or table salt (made by mining deposits left from prehistoric seas), is because no one produces these things artificially. There's no good economic reason to do so when you can just dig it up or dry out some seawater: making it artificially would be more expensive.
The same economics don't work for diamonds, for various reasons.
What about lux watches? A 3 dollars Quarz Casio can beat any hand made Rolex in precision… but still some buy it. And in between there are all kinds of possibilities.
The point of the tweet is slightly different from what you're making though. Your comparison would be valid if the artificial diamonds were somehow cheaper-looking while otherwise performing as good if not better than natural diamonds for use-cases where aesthetics don't matter (drill bit tips, or what have you). But that's not the case, the artificial ones look exactly the same - maybe a jeweller could inspect them and say "ah this one is artificial, I think".
They also mention suffering, which seems kind of hard to measure but I think it's relatively well known that natural diamonds are saddled with a fair bit of baggage in that regard (slave labour, conflict diamonds, things of that nature).
You can't easily map this onto luxury watches, but it'd be like if you could buy a watch that was indisputably a Rolex, was "equal" in aesthetic appeal to its equivalent Rolex while being cheaper and didn't involve whipping the watchmaker who built it or something. And maybe a few watch afficionados with special knowledge of serial numbers could inspect it and go "ah this one was made without whipping the watchmaker"
A high quality mechanical watch, aside from being a beautiful object from an artistic and engineering perspective, tends to be a significantly better store of value than diamonds (vs natural diamonds especially)
(This is not to say you can or should ignore the suffering caused by the diamond industry)