I'll start with a bad reason to keep him: Rams gave up a 2nd round pick and Gaines for him. That's a sunk cost.
Here are better reasons:
1. McVay's system requires stretching the field. Watkins is the best vertical threat. He maintains big play potential.
2. Watkins makes other players look better. He commands attention from opposing team's #1 CB. As such, he deserves some credit for the performance of Woods, whose situation might look differently being covered by the best defenders. By stretching the field, he also plays a role in Gurley's performance at the second level.
3. After all the years of board chatter how the teams needs better WRs, anyone really want to take a step back? Free Agent WR class isn't impressive and other options leave too much uncertainty. Yes, there is opportunity cost in devoting cap room to him, but the options at other positions seem superior.
4. He's young. Very young. Maybe not the superstar envisioned when coming out of college but certainly productive, especially in the red zone, and certainly has a breakout season in him with more experience in McVay's system.
5. Imagine him on the 49ers. Very real possibility if Rams let Watkins loose.