Cascarino is convinced Watkins now lacks the service he once had at Villa and has also been unsettled by interest from bigger clubs.
He told talkSPORT: "When Ollie Watkins got dropped against PSG twice and they'd lost the first game in Paris and then the second game, everybody, and me included, thought Ollie Watkins would come back into the side and start again.
"I think, if I remember right, I think he had like 15, 17 minutes in the performance at home at Villa Park because Villa played well that night. But Ollie had got dropped and left out.
"Now what he achieved at Villa in the time before this issue came about was extraordinary. One of the main reasons they got to the Champions League was his goal scoring.
"Look, his head got turned. okay, there was interest from Arsenal, but he also didn't get the loyalty from his club, from his manager.
"Ollie probably felt, I'm not really wanted or I'm not as necessary as I once was.
"Some people will say just get on with it, it hasn't worked out, you haven't had your move, just get on with it now, show us what you can do. But now, Bailey's left the football club, there are not the same weapons for Ollie to get goals on a regular basis."