Yes, as far as I know, his drinking and smoking affected his health.
I don't think it really affects his message, or affected his mindset though.
One of the things he talks about in one of his lectures, are the myths that people build up about Zen masters, or Buddhas, or gurus, or whatever you want to call them. He never called himself any of those things, though he certainly was. One of the pervasive myths about gurus, is that they are these peaceful, serene, passive people, sitting in the lotus position under a tree, on a mountain somewhere. But when you meet them--and Watts met many of them in his life--you find that they have real personalities, girlfriends, lovers, smoke, drink too much, curse, get cranky, etc.
One of the stories he tells, is of one particular master, who told him that contrary to Buddhist teaching, he was attempting to become 'attached' to as many things as he could, just to experience them. Another, when asked "What is it like to be enlightened?" answered, "It's just like normal life, only 2 inches off the ground." Watts was of a philosophy that life was to be savored, experienced, despite what it might mean in the current existence. He spent a lot of time with people like Ginsberg, and Leary, so that should tell you a lot. He was one of the fathers of the hippie movement, though he wouldn't have claimed it. He was there with those who were, and no doubt had a huge influence on them.