Watson's an unproven player in the top order in International cricket. That Hussey averages 80 batting at six or seven is far less relevant than the number of balls he faces batting down that low. Fair enough if he's batting down that low in deference to proven players like Clarke or Ponting - but not Watson. With a World Cup around the corner he doesn't deserve to take up one of the prime batting spots in the order, just because he is not comfortable during the 15-20 balls you get to face at number seven.
He's only "unproven" because he hasn't played there much. He averages 42 in 10 innings batting in the top 4, which is perfectly acceptable, and has scored 4 of his 5 half-centuries batting there, despite only batting there 10 times. Surely that indicates he is at least capable of batting in the top order
like a batsman. By contrast, in 26 innings batting 6 and below (he has never batted 5) he has 398 runs @ 24.88 and one 50. I doubt his SR down the order is any better either.
Regarding team balance, the fact of the matter is that the players at 6 and 7 have to bat in the vast majority of matches, and it's a very important position. Hussey's batted in 41 of his 52 games. If Hussey turns 30 balls at the end of the innings into 40 or 50 and Watson turns them into 20, or worse, gets out cheaply and exposes Lee or Hogg, it hurts the team far more than Hussey only getting to face 30 balls instead of 50 or 100. In reality, if Hussey comes in at 4 he's probably going to play in a similar fashion to a Clarke or Watson in terms of run scoring, just be less likely to get out. Provided that Watson batting in the top order is making runs and doing so at a reasonable rate, there's no loss in playing him there and having someone who can take advantage of the late overs like Hussey down at 6-7. A Watson 50 at 4 is just as good as a Hussey 50 and is unlikely to come any slower, but Hussey at 7 is infinately better than Watson.
Assuming that A) Watson is crucial to the team for its balance and deserves to be picked, and B) Watson is scoring at a good average and SR when batting in the top order, it makes sense to pick him there rather than bring players like Hussey and Clarke who succeed down the order up. Since he's bowling well and has so far batted well in the top order, it makes sense to give him an extended run there. The same argument, incidentally, applies to Symonds. He's a good hitter and quite capable of batting down at 7, but he's a far better player when he has the opportunity to play a long innings. Hussey on the other hand is as good with 10 balls to bat as anyone in the world, and can also anchor a chase or play a rescue job. He's a perfect player to have down the order and bring up only when it's necessary.