No, not all functionality requires an iPhone, but no one said you could use one without an iPhone. It is not a stand-alone device. It was never meant to be. It is an accessory for the iPhone. You have a problem with that, take it up with the designers. The point is to relieve users from having to always be reaching for their iPhones. . . and to add functionality the iPhone is lacking, or inconvenient to use quickly. Yes there will be times that it requires two hands. . . but you don't HAVE to use it.
All meaning to use the full TOTAL functionality of the watch. Not that every function needs an iphone to work.