The simulation idea doesn't work only because people apply it incorrectly. Our brains do in fact create our experiences with no contact to the world outside our bodies, its our sensory organs that give data to the brain to create our perception of experiencing things.
We are all partly made of simulators, but knowing this changes nothing for each of us since we can start associating ourselves with a larger force of nature that happens when we group ourselves together for changes we want to see in the world.