I think the last part is the problem with this argument. We can already simulate worlds (Minecraft), they're just very different from our own. It has to be possible to actually simulate our universe. Not just theoretically, but also practically: Someone needs to have enough energy, time, engineering ability, other resources, and enough motivation¹ to run the simulation.

Also, if you permit me to get spiritual for a moment, I believe that it could be theoretically possible to simulate any fully materialist universe, but I'm not convinced consciousness can arise from doing maths. Since I am conscious, this universe must not be simulated, no matter how many simulated worlds actually exist.

[1] I'm assuming that most creatures intelligent enough to understand the concept of simulating a universe will want to try it. But if it takes an entire civilization to do so and that civilization has to choose between, say, spending the energy on simulation running or on food production, it's pretty clear what will happen.