It fails what I call the Cute Test.
It's too cute. the idea that we are in an elaborate computer simulation is very complicated and much too cute. And why us? Why not some other simulation? We were "chosen" to exist in this particular (infinite) simulation. So then we are, in a sense, special.
And how do you power a simulation that maps every proton? It would take a near infinite amount of power to model an infinite universe.
It's another strange example of how dumb smart people are. Someone like me, who is kind of dumb, has to really scrap and think in a more three dimensional fashion to cognitively exist in the same playing field as people who come up with these theories. But that doubt and effort creates a mental toughness forged by constantly questioning my own assumptions.