Hi
I'm afraid that no-one here can advise you why Apple has taken that decision. You are not talking to Apple here - this is a user-based technical support community.
Whilst Apple no longer sells new Apple Watch Series 2 models, no model of Apple Watch has yet been declared vintage or obsolete by Apple:
Vintage and obsolete products - Apple Support
There is nothing wrong with Apple Watch Series 2 models. They can be updated to the latest software version - watchOS 4 - following its release (due on 19 September). The paired iPhone will need to be an iPhone 5s or newer model, running iOS 11 (also due for release on 19 September).
Follow the instructions here in due course, updating your iPhone first (and starting by making a backup of your iPhone):
wmdlaurie wrote:
Would like to upgrade to the 3??
For an Apple Watch that has been purchased directly from Apple, Apple's return policy varies by country, but is typically 14 days. Other retailers' return policies may vary.
Apple does not currently offer either a trade-in program or an upgrade program for Apple Watch.
You may wish to consider selling your Apple Watch privately and putting the proceeds towards your new purchase. If doing so, be sure to follow Apple's instructions for unpairing your Apple Watch and turning off Activation Lock, such that it is left ready for a new user to set up as their own:
About Activation Lock on your Apple Watch - Apple Support