In cases like many school shootings, where the gun was stolen ahead of time, all it does is require the culprit to steal the watch too. A physical key (old-fashioned or cryptographic) would do the same thing but more reliably.
The term "smart gun" brings to mind a development that I think most users of HN would agree is a bad idea. Making a gun that tries to automatically determine who's authorized to shoot whom, like a Dominator from Psycho-Pass, seems to open up a whole mess of problems. Making more reliable non-lethal weapons is the direction I'd rather see the problem attacked from.