No one predicted Watkins would be the guy chosen with the draft, but my thoughts on it are this:
Football is an incredibly dynamic and complicated game, so this is somewhat of an oversimplification, but in a nutshell what Reid seems to do is, more than any other coach that I can tell, have a philosophy of drafting the player(s) which will most improve the value to the team. With that in mind, why did he take Watkins?
I'm no expert on offense or line play, but it seemed generally agreed the real problem last year was line play, and the right side in particular. Let's assume that the FO concluded that the real weakness was in fact RG, and that with a solid stud at RG, the RT problems would go away. Let's further assume they targeted Watkins as the best player to fit into Mudd's system for the future.
Given that, how does Watkins improve the value to the team? When you think about it, many ways. First, Watkins greatly improves the odds of Vick making it through an entire 16 game schedule. The dropoff between Vick and the next best QB we have is great, especially if you assume we'll trade Kolb. In fact, it might be argued that only by signing Watkins will the FO feel comfortable trading Kolb in the first place, and the fruits of that trade will be to some extent due to the Watkins pick.
Second, Watkins allows the right side to play with less help from the TE and FB/RB, thus freeing up more targets for Vick. Last year the Brids often used max protect schemes where effectively only DJax and Maclin were options, which increased the time Vick held onto the ball, and increased his chances of getting hurt. With a solid right line, we can more easily run 3/4 wideouts. Furthermore we can free up Celek much more in 2011, who was often limited not due to ineffectiveness but simply due to the fact that he had to stay in to protect a lot last year. The increase in options available to Vick next year also leads to likely increased production from our 2 star WRs, who will be more and more matched up against single coverage.
Overall, if you accept the idea that RG was the linchpin of our poor line play last year, and if you further accept the idea that Watkins was by far the best option to correct that failing, you cannot help but believe that through a wise if superficially unsexy draft pick, the FO greatly increased the value of every single other player on the offense, and possibly the defense (pending how the Kolb trade ends up).