Not to mention that they were even available on the first LED's in the early 1970's!
Well, today's LED watches and the 70's ones are a completely different ball game. LED modules in the 70's were mass produced from many different companies because these were mainstream watches that were almost as popular as analog watches for a short period. Because they were mass produced, it was cheap to constantly write new IC schematics, and add new features.
When the first modern LED watches hit the market around '98/'99, from companies like Fossil and Atomic, they knew, as well as the company that made the modules, that these would be a niche item. It was probably decided not to use seconds to keep cost down when designing the IC. That very first IC is still used today and has been basically copied down from one module, to another. This is why most LED watches don't have seconds. It's not that we don't have the technology anymore and it's not a conspiracy. It's simple economics. So if someone approaches a company, say in China, about an LED watch, they are most likely going to be dealing with that older IC. If they want it upgraded to display seconds, it's going to require an IC rewrite and that's going to cost around $2000 to $4000. For the small percentage of people who could care less about seconds, like me (I've never use it on my 70's watches), it's just not worth it.
Setting time on LED watches without seconds is not hard, as long as they roll to ZERO as each minute is changed, which I believe they all do.
Jeff