> Another interesting thought is if we ever become capable of simulating such a universe, it seems much more likely than not we're also a simulation, since there's a possibility for each simulation to produce it's own simulation or collection of simulations.

There's a lot of "ifs", though, for the argument to work:

The simulations must support a higher density of life than the universe does. If you need a planet the size of Jupiter and a hundred years to simulate one second of life on Earth, then each nested layer of simulation is going to make the number of simulated humans smaller. It seems highly dubious to me that simulations could be dense enough: if you can build a simulator capable of evolving a million life forms, couldn't you slash all the overhead of environmental simulation and use these same resources to build ten million life forms that interface with the real world directly (imagine nano-life, if that helps)?

There must be sound economic reasons to build these simulations. Otherwise, too few of them will exist, and they will not be run for long enough. I can think of a few reasons, like research or entertainment, but I do not think they would suffice. Specialized, focused simulations are useful. Simulating whole universes is overkill. It's a waste of resources.