The simulation argument, going back to Bostrom, relies on two flaws.
1) It leverages our optimism to corrupt our understanding of statistics and logic. It essentially says that if you think humanity doesn't destroy itself, then our descendants will probably try to simulate us. But of course if you just take a statistical view of the potential future ordered states of the universe, there are FAR more potential future states in which we don't exist, than states in which we do. The chances we are living in a simulation now are equally as small.
2) Bostrom hypothesizes that our descendants will try to simulate us. But it is impossible to completely simulate a system from inside that system--that's basic thermodynamics. So simulation proponents argue that our simulated reality is running in a more complex universe than we experience. But if that is the case, then the beings running the simulation are not our descendants! They're the descendants of whatever more complex beings came before them. Once again the central logic of the argument fails.