Yes, people watching is great. I really notice how far more people in Disneyland wear Disney clothing (hats & t-shirts) than they do in WDW. The Disney spirit is stronger in Disneyland.
An added benefit of sitting on a bench and people-watching is being able to soak in the ambiance of the park. Sometimes people are too busy rushing from attraction to attraction to notice the park's beauty. The park itself is an attraction. Take the time to enjoy it.
COOL EXPERIENCE: My wife and I were sitting on a bench in the hub, facing the Matterhorn and Tomorrowland when we saw a big furry striped (Disney) cat run across the road toward the Partners Statue. I didn't see where he ended up, but that sure was an unexpected surprise. Usually I only see the cats on the ROA and by the old Skyway attraction in Fantasyland. Now I can add cat-watching to the list...