American Indians were furious with Interior Secretary James Watt last week--even to the point of calling for his ouster.

The precise nature of Watt's sin still isn't clear, though what he said, in a taped television interview, seemed clear enough:

That problems of the most severe sort --including drug abuse, alcoholism, unemployment, divorce and venereal disease--abound on the Indian reservations; that Indians have "been trained through 100 years of government oppression to look to the government as the creator, as the provider, as the supplier, and have not been trained to use the initiative to integrate into the American system"; and that "if we had treated the blacks in America like we're now treating the Indians, there would be a social revolution that would tear the country up."

Was last week's outcry over Watt's description of the problems? I have heard much the same description from Native American leaders. Was it that Watt attributed the problems to "the failure of socialism"? It's hard to read the reactions to the secretary's remarks as support of socialism.

The executive director of the National Tribal Chairmen's Association put his finger on the source of the outrage: "We resent it," Elmer M. Savilla told me, "that the criticism of conditions on the reservations comes from the very man who could do the most to improve them." He said Watt has deliberately done less than the law intended for the Indians and that he has promulgated regulations that weaken the impact of important pro-Indian legislation. But Savilla also acknowledged that he had been influenced to call a press conference on the issue in part because of early, apparently erroneous, reports that Watt had called for abolition of the reservations.

The nearest analogy, I suppose, would be for the secretary of health and human services to complain of crime, poverty, disease and ignorance in America's black ghettos while ordering reductions in outlays to ease the problems. And if he also seemed to be calling for an end to public welfare, the screams of outrage would be deafening--even from those who shared his view of the problem and who believed that the present welfare system tends to exacerbate them.

The lesson for government officials, if they care to draw one, is that you don't draw attention to embarrassing problems unless you seriously intend to do something about them.

The lesson for the Indians is less obvious. It seems clear enough that the reservation system has been a monumental disservice to American Indians, if not in concept at least in practice. Watt's phrase, "100 years of government oppression" is accurate enough.

But does the solution lie principally in more generous outlays for the reservations? Is it more sensible-- or is it too late--to talk of massive education, job training, socialization and economic development programs to "integrate" Indians (at least the young ones) into the modern American mainstream? The effect of the latter approach would be to abolish the reservations, or at least to permit them to die.

It may be that, from the viewpoint of the "beneficiaries," it is illegitimate even to discuss alternatives to the reservations (or to welfare) unless those doing the discussing have demonstrated their sincere concern.

The perpetually controversial Watt has demonstrated nothing of the sort, and you can hardly blame the Indians for supposing that his remarks had some other purpose than the improvement of their disastrous lot.