Simulation theory goes out of its way to make the point that algorithms/numbers/math/data/abstract stuff can "feel" as concrete as anything you'll ever interact with feels, and thus there's no reason to think anything you've ever experienced was anything other than data. But then rather than following that line of thought to it's logical conclusion (something like neopythagoreanism or Max Tegmark's Mathematical Universe Hypothesis) it posits a "simulator" universe that's "actually concrete". (Maybe not the next one up the chain. Maybe not two hops. But it's out there if you go up the chain far enough. Trust me bro.)

It's like arguing passionately that human behavior and experience are fully (and best) explained without resorting to body/soul dualism and then insisting that there's definitely an alien civilization out there that totally has incorporeal souls. Total woo woo.