Reus had been expected to leave Dortmund in the summer, with Real Madrid, Barcelona, Bayern Munich, Chelsea and Manchester City among the clubs linked with the Germany international, whose previous deal included a release clause set at just 25 million euros.
However, the 25-year-old signed a contract extension until 2019 on Tuesday, with BVB announcing that the new deal does not include a release clause, even if his hometown club -- currently in the relegation playoff place -- were to drop into the second tier next season.
Reports suggest he will earn around 10 million euros a year under the new terms, but Watzke said that pales in comparison to what he would have received had he decided to move on.
Speaking at the SpoBis sports business summit in Dusseldorf later on Tuesday, Watzke added : "It's remarkable that he prolonged his contract given those circumstances. Marco is just a 'hotspot.'
"Economically, and from the perspective of our sporting situation right now, we are not able to stand the pace -- looking at the worst-case scenario, you don't even know which league we'll be playing next year. Marco could have earned double the money elsewhere."
- Borussia Dortmund (@BVB) February 11, 2015
Widespread media reports in Germany claim Reus is to earn eight million euros each year from BVB, with stakeholder Puma adding a further two million.
Watzke said Reus, who returned to Dortmund from Borussia Monchengladbach in 2012, had recognised the support the fans have offered during the BVB's struggles this season.
"A transfer -- and this might sound melodramatic -- would have been a real burden for him," he said. "He has emotional ties to his hometown, and the players appreciate the familiar atmosphere at the club, where they are not hauled over the coals."
Local football weekly Reviersport said Reus' decision sent a strong signal in the direction of Bayern, who "always got what they wanted in recent years," but the broadsheet FAZ suggests it actually benefits Pep Guardiola's men.
Bayern had eased to the title last season, finishing 19 points clear of second-placed Dortmund, and there have been suggestions that a lack of competition in the Bundesliga had been a hindrance as they were thrashed 5-0 by Real Madrid in the Champions League semifinals.
FAZ noted that -- along with Wolfsburg, who added Andre Schurrle to an already-strong squad last month -- Bayern will "keep another adversary, whom they need in the national competition to be successful internationally."
Der Spiegel, meanwhile, suggested the Reus news could provide the spark required to turn Dortmund's season around.
"If this will not unleash a new force in the relegation battle then nothing in the world will do so," the news magazine said. "Marco Reus now has the chance to prove himself at BVB as leader, as a saviour. This will not only lift his club but also his reputation. He can still leave after that."
Suddeutsche Zeitung, meanwhile, called it the "biggest comeback sign" for BVB.