I think you are right in pointing out that people, wo approach this simulation idea could be offended by it. True.
I am not certain if I feel truly offended or if it is just a reaction of disbelief. It depends on my mood. Whenever I think about an idea or concept, I ask myself: Would I find this idea worth to accept as real? Would it do anything good for me and my personal existence?
My answer here in particular is: No. I prefer it to exclude a "simulated reality" from my realm of decision making and would consider it irrelevant; though thinking and contemplating about this idea I find not un-interesting.
Having read your thoughts on this topic, I'd like to ask:
In which way does "simulation" differ from "creation" and thus from a religious belief-system? For me, it sounds like a replacement of those and other terms and definitions like a "higher intelligence"...
Also: is it not similar to what is assumed about omnipotence? If there is a creator or a creating entity behind a simulated reality, do we not merely discuss this on the bases of the same meaning, using only different vocabulary?
Or is it, that you may mean it in the sense, that we, the organic living beings, create this simulated reality by letting it become a "mega-trend" (belief-system) and so it has the potential to become real, whether it's real or not?
What about animals (or plants)? Do you think, they are unconscious about their existence? If you consider they aren't, what kind of influence can they possibly have on the human realm?
And last but not least, how do the absolutes fit into this concept we just talked about?