Part of the problem with this is that (for obvious reasons) the way the security services operate is largely opaque to the public and can't really be any other way.
So as far as I know, we don't know what the criteria are for getting on the "watch list". It might be very basic - i.e. anyone who gets reported for any reason (as Abedi was) just to be sure. Or it might be more intensively researched, such as people who are known to have travelled abroad and connect with terrorists.
I'm not really sure how we can make a judgement on whether blanket internment would be a good thing without knowing the criteria for being on the "watch list" - and obviously it isn't in anyone's interests for those criteria to be made public because our enemies could game them to avoid surveillance. If the security services use the looser example (anyone who is reported), then clearly internment won't and can't work - and the UK would effectively be a police state. If, on the other hand, the watch list is composed based on more intensive research, there's a better case for it.