Tis very true that Town Watch have their uses. They aren't as cost effective as a unit of Peasants for strictly Garrison duties, but they do have other uses.
They can support your early armies against weaker enemies, when numbers matter more than quality. They're cheap fodder and can be sacrificed at will. Or better still, you can stick them on defence mode in front of gates during siege defence battles, and have them absorb as much of the initial enemy charge as possible when the gate is forced open. Sometimes they hold their own for a bit, allowing the legionaries and other units to pelt the enemy with pila and so forth, although they're unlikely to get more than a handful of kills between them. I almost feel sorry for the poor beggars - thrown into battle without consideration, and without any hope. Who'd be a Roman!