There actually is a reason for showing digital watches at 10:09 (or, more often, 10:08): it shows that the LCD are functioning properly, and that the watch can show all four digits necessary, without resorting to an illogical time.

The numbers in an LCD are usually set up like so:

 _
|_|
|_|

The numbers that show the most sections are (in decreasing order) 8, 0,9, and 6. Since one would want to show as many lit sections as possible, the logic would follow:

Minute: Ones digit: can be any number. 8 or 9 is good. 0 might make the watch appear broken (see below)

Minute: Tens digit: can't be higher than 5. 0 is therefore the best choice.

Hour: Ones digit: Can be any number, but only 10, 11, and 12 are two-digit numbers, so the logical choice is 0.

Hour: Tens digit: Needs to be a one to show that the display is working.

Therefore, in a non-military time digital watch, 10:09 is a functional choice. The fact that it agrees with the best display on an analog watch is just coincidence.

Really.