The problem with the argument is that although life might seem like a wonderful adventure from Mr Musks point of view, a game or simulation that would be interesting to play, and experience, there are plenty of others who experience a much less fun 'game' experience - and wouldn't sign up for it in the first place.
If this is a simulation, and we assume that the rate of growth in computing power within the simulation is a reasonable model of growth in computing power outside the simulation that has allowed such a simulation to exist (as Mr Musk has done) , then we must also apply that same rate of progress to other things in the simulation - such as the rise in animal rights, consumer protection laws, and increasingly, the protection of non-human animals through organizations such as PETA.
Litigation has also similarly grown over the last 100 years or so.
If we are all really unknowing or unwilling users of a simulation, then the consumer protection laws should have also grown in a similar way to how technology has - and would be strong enough to severely punish any organization that subjected its users to the crappy life experience that many have in this simulation.
On the other hand, if we are all virtual constructs with no corresponding outside user controlling us, then the external equivalent of PETA for AI would surely also have grown in power too, and outlaw all the horrible things that happen to people in this virtual world.
Ergo, if we are all in a simulation, then the organization responsible must be about to go bust because it's got to have a galactic size lawsuit brewing over all the injustices that occur within it, and would thus wipe out any such simulation like this - therefore we must be living in the real world.