Battery life. Radios are energy-intensive, and the processing required to run "full apps" is also often pretty steep. In the meantime, while battery chemistries are getting better space is very much at a premium on one's wrist.
From the other recently-posted article, the new Pebble watches are targeting 30-day battery lives between charges. That would be unthinkable for a watch that manages its own wifi/cellular connections.
