It does push the problem up, but it does let us factor out a lot of complex particle physics which are not needed to run the simulation.
Remember in this case the simulation is not running a model of physical reality - it’s only running a neural net that is fed into your senses.
In that case there are no ‘atoms’ it’s just a concept fed into your mind. Just like in dream it’s hard to question reality, you just go along with it.