Tethered balloons are cheaper to install than watchtowers of a similar height, although the day-to-day running cost of a balloon may be higher. Another benefit of a balloon is that its location can be changed much easier than a watchtower’s. A balloon’s advantage over flying drones is the cheaper initial price and running cost.
Cameras and sensors are sufficient for surveillance, so no people are needed to fly the balloon or even be near it (or at the top of a watchtower). The cameras can be powered from the ground, with the electrical cable doubling as one of the tethers, or by solar panels on the balloon, if these can be made light enough. Using infrared cameras, the balloons can help detect forest fires, allow farmers to watch their herd and see predators or large pests (kangaroos, wild donkeys, horses or camels) entering their land.
One possible limitation of a balloon is that in stormy regions it can be blown against the ground and rupture. The tethers can be made strong enough that the balloon does not fly away even in a hurricane, but the tethers are flexible, so cannot push the balloon away from the ground.
Because the balloon is distant from people, it can be filled with cheap hydrogen, despite hydrogen being explosive when mixed with air. The only limitation is if a fire or explosion of the balloon while it is in the air would cause significant economic or environmental damage. Examples are using the balloon for forest fire surveillance in fire-prone regions (burning bits of balloon may fall to the ground), or for watching an oil refinery. The risk of the balloon’s explosion on or close to the ground can be minimised by having an emergency mechanism detect when the balloon loses altitude and vent or explode the balloon while it is still high in the air. For the initial launch and subsequent landing for repairs, the balloon can be temporarily filled with helium or hot air. A thin hose from the ground is needed anyway to replenish the gas in the balloon that is slowly but steadily leaking out. The hose allows replacing the gas in the balloon with a different one.
Electrolysis equipment is probably not light enough to float attached to the balloon, so the balloon cannot produce its own hydrogen from the water vapour collected from the air. If the balloon has a power cable from the ground, then it might as well have a gas hose also. Again, a hose can double as a tether.