I assume you've read about Bostrom's trilemma, which a lot of recent discussion about simulation has been based upon.
http://www.simulation-argument.com/simulation.html
https://en.m.wikipedia.org/wiki/Simulation_hypothesis
I can't think of a good answer to his trilemma, except that the pessimist in me suspects that option 1 may be a good explanation.
People have also used this trilemma to invoke solutions involving a deity of course.