So upshot is that I'm out of pocket a tidy sum of money (which I can live with but isn't ideal) and my faith in mankind has taken another stumble, because fuck this guy and his con game. I really wonder about what goes on in peoples' heads sometimes, like you must know you're being a total shit.
On the other hand, it's worth noting that scams like this -- and the Nigerian prince scam, etc. -- don't work if they don't have greed to play on. You didn't want or need the watch by your own admission. You didn't even know anything about it. You just saw dollar (er, pound) signs that could be yours for a minimum of work if you bought it cheap and flipped it on eBay.
Yeah, this guy's an asshole for running around scamming people. But the truth is, you burned yourself. He just gave you the opportunity.
I'm not trying to make you feel shittier, although I'm sure I probably am. I'm just saying, as a learning experience, you won't get much out of it if all you learned was "that guy was an asshole."
EDIT: I misread the part of your post where you said he asked you NOT to put it on eBay, so I retract my assumption that your goal was to flip it for a profit, and apologize if that was not the case. Still, paying 300 pounds for something you "don't want or need" just because it was there and cheaper than it normally would be strikes me as an unwise policy in general.