Watertown is good, it was an experiment that had to be done/tried, but did Frank's audience believe him as the lead character? he could have given the best performance of his career but the role and the location didn't exactly fit the actor playing in that role, for many fans.
See, that's where I disagree -- I think it's precisely *because* Sinatra's image is so different from that of the protagonist in Watertown that it works so well. I wrote a long blog post about Watertown at
http://andrewhickey.info/2010/04/13/albums-you-should-own-watertown-frank-sinatra/ , so I'll just link that rather than repeat it all here, but Watertown may be one of the two or three greatest albums ever made, certainly among the most emotionally powerful.
I respect that, and in no way would I debate the album suggesting opinions are either wrong or right. But I can also say as someone who is equally a fan of Sinatra, I respectfully agree to disagree, on my opinions of Watertown.

I think casting against type is what may best serve to keep an actor on his/her toes, in the context of them being artists within their chosen craft. However, when that actor's fans feel that something is too much of a stretch to be believed 100%, no matter how great the actor does that role, they won't be able to escape the typecasting imagery that created such a powerful image in those fans' minds. And some feel casting against type causes that actor to overplay the part rather than relaxing into it.
With Watertown, I'd never suggest Frank gave anything less than his all to that role, and the music was challenging and demanded more from the listeners than playing "New York New York" on a jukebox for kicks. But ultimately, my opinion only, I think the Watertown character was too far from Frank for many fans to invest the time necessary to get into the album and believe him in that role. Is that the fans' fault or was the project itself overreaching in its concept based on whose name was on the cover? Again, not that he didn't try, but it felt to me like Sinatra was trying to be that man rather than relaxing into his other characters which were closer to who he was and the people he was around in his own life. It's opposite the way I can get lost in certain of his 50's Capitol albums - you look at the cover and the guy you see in the artwork or the photo feels like the guy talking to you in the songs.
Frank Sinatra is (blinking marquee lights here...) *FRANK SINATRA!!!!*, that's the blessing and curse of becoming a pop culture icon in the upper stratosphere of celebrity so you become your own characters, in effect. I think Brian Wilson would have similar difficulties trying to sing as the characters Sinatra became in his songs because it's a world foreign to who he is as a person and as a persona to his fans. Again, not that he wouldn't use his musical skills to put it across, but it's something beyond that which made both Sinatra and Brian who they are. if you push that image too much, it treads on very thin ice.