It would be nice if pages were automatically removed from the watchlist after a specified period without the user editing it.
Topic on Talk:Watchlist wishlist/Archive 1
Even better might be if that were a default behavior unless the user "pinned" an item to the watchlist, ie, made it permanent. Other approaches might be keep items on the watchlist until some limit (eg, the effective maximum for editing the list of about 20K items or some size-based limit) was approached, the user sent an e-mail and a user-page message with enough time to edit the list, including "pinning" oldest items. If the owner fails to reduce the list below some level, the oldest "non-pinned" items would be removed. This would seem to cover a lot of the problematic situations at Wiktionary.
A helpful supplement might be to allow a user to edit chunks of the watchlist rather than the whole thing. Editing by namespace should not be too hard. Editing the oldest 10K items might work.
I get the feeling that at present the date that an item was added to the watchlist by a user is not retained.