Would your upgrade want better sensors that the Series 2 case was not designed to include? Blood/Oxgyen, ECG, body temperature, Cellular, improved heart sensor, ambient light sensor?
All of those things require changes to the sensor package, and most likely could not be accommodated with your existing Stainless Steel case.
So all you would get to save is maybe the display, the sapphire crystal and the watch band. The guts would have to totally change, the case and sensors in the case would have to change.
The cost to design an internals that have all the new capabilities but fit into the smaller case would be millions of dollars on Apple's part (that includes tooling up manufacturing to build the special guts, and the special case that will work with the older screen and sapphire crystal, and hold the new sensors, and a new battery that fits with new guts).
Then include the labor to actually disassemble your Series 2, recycle the old guts, sensors and case, and reassemble with your old screen and crystal.
And you have to consider that Apple needs to recoup the costs of design and manufacture retooling, so either there needs to be high demand to put new guts into a series 2, or they have to charge you a lot of money to the upgrade (most likely more than you paid for the original Series 2).
Upgrading a Series 2 is not a trivial as you image.
