Let me start by saying three things, it is my first time ever posting here, I am also a philosopher, and finally I'm glad to see some philosophy applied to Myth.
First of all, Descartes was potentially incorrect. It is indeed possible to concieve of one's nonexistence, albiet difficult and frustrating, but not impossible.
I fundamentally agree with your theory, however I think that in the Myth world Unlife carries a slightly different definition. I think that apart from just allowing the body to be mortally wounded or destroyed and having the soul go on existing to be later brought back to the spatio-temporal plane (ie Shiver), I think that since the connection between body and soul still exists, it so follows that the being would be intelligent and possibly independent. This would explain how the Deciever cannot turn a lowly Thrall (because it is in a state of undeath) but can turn a being as powerful as the shade Phelot (who is in a state of Unlife).
In addition, I do not believe the Watcher is in a state of undeath or unlife. I think "finding the Dream of Unlife" is signifying that he has attained a level of power that would allow him to create an intelligent servant. It can be theorized that it takes more power and skill to create a unliving entity than an undead one. Because of this, if one was powerful enough to now creat a shade then one would of course be powerful enough to create a thrall.
The Watcher himself, along with Soulblighter, and Shiver (until Rabican destroyed her body), and Balor were all flesh and blood. There are many instances in Myth were beings have largely prolonged their lifespans through magic. I think as the "second or third most powerful sorcerer in living memory" the Watcher could manage it and is not a lichen.
One thing not explained in Myth, but must be assumed is Soulblighter also somehow being able to conjure the dream of unlife otherwise he would not have been able to summon undead after the Watcher's defeat, or bring back Shiver using Tramist's Mirror. The only other possibility is that he was aided by another necromancer possibly even a still living Watcher...
"'To live alone one must be an animal or a god' says Aristotle. There is yet a third case, one must be both
- a philosopher."
-Friedrich Nietzsche
