Even if conservation of energy is a thing in the layer above us, there's no reason to suppose their energy limit is even remotely being taxed by their simulations.

I think the theory sort of invites that comparison by starting with "if our simulators were at all like us ..." He accounts for it some by suggesting our energy is conserved likely because it's limited outside. But I agree with you, all bets are off. For all we know, we are all ants on a string in terms of relative complexity.