Looks like Apple corrected some confusing language on the submission-side of Apple Watch apps.
When iOS 8.2 first went live, Apple's developer upload portal, iTunes Connect, referenced a requirement for an on-device screenshot rather than simulator-only screenshots. That would mean you had to have Apple Watch hardware in-hand to get that specific screenshot and be able to upload to the App Watch App Store. As of Friday, however, it seems like the language has been corrected to reflect that simulator-only screenshots are fine for submission.
(That said, with something as new and different as the Apple Watch, while some genius developers may be able to nail it flying simulator-only, I can't help but think many will find enormous, if not app-changing, benefit from having actual hardware in-hand.)