I agree it's fun to speculate about the simulation hypothesis. But there is a powerful (IMO) argument against it which I've never seen discussed.
A bit of background. The arguments I've seen for the simulation hypothesis start with its presumed eventual technological feasibility, and the assertion that we humans would construct such simulations (to study various questions) if we could. In fact, we would likely construct billions or more of such simulations, so the odds are a billion times higher that we live in one of those simulations than that we live in the "real" universe. And, if we are (or will be) capable of doing it, who's to say it hasn't been done already by similarly motivated simulators?
Except for this. I don't think we'd ever do it. The simulations would be banned by every conceivable cyber-ethics committee. There's no reason to believe the simulators are our moral inferiors: they wouldn't do it either.
Why is it morally wrong? Because of "the problem of evil." That is, how do you reconcile the existence of evil with the notion of a benevolent Creator? I don't think the argument is telling against the existence of God, but it is (again IMO) telling against the simulation hypothesis.
Why is it more telling against the simulation hypothesis? Because of that factor of billions. The factor that makes the simulation hypothesis credible is the factor that amplifies the amount of pain and suffering. The simulators would have to be unimaginably evil to generate such suffering simply to assuage their curiosity. There's no reason to believe that, so there's no reason to believe we live in a simulation.
I can see two possible objections to this reasoning. There are likely others that I haven't considered.
First, maybe there is some "greater good" which warrants that suffering. Perhaps the simulations are intended not to satisfy curiosity, but to forestall some dire and otherwise unavoidable fate. Seems very unlikely, but (barely) within the realm of possibility. You'd have to assume the simulators have incredible technological power, but can't solve their existential crisis more creatively. I don't buy it.
Second, perhaps their notion of morality differs from ours. But you have to assume the aliens are similar to us in order to use our curiosity to justify theirs. If they're not like us, there's no reason to believe they'd construct billions of simulations.
The simulation hypothesis is a fun idea, but there's good reason to be skeptical.
The simulation hypothesis also devalues our existence. Nothing we do matters. So, it seems best not to entertain it seriously.
OTOH, the simulation hypothesis explains the Fermi paradox. We don't see any aliens because there are none. There are none either because the simulators didn't put any in, or because the aliens that were put in all figured out that they live in a simulation, concluded there's no point to anything, and then terminated themselves.
Until there's evidence, I'm going with no simulation.
But really, who knows?
