I've been thinking about that, and I think the hole in your story is that we are not in one of those simulations. If your assumption is true and sentience to cyberspace is a one way road on the evolutionary ladder, then it must be statistically infinitely more likely for a sentient mind to be inside a simulation. Am I really to believe that we are the ..01 percentile that starts it all? I don't think so.

And no, we are not inside a simulation. Not one that's built for us anyway. This is not very good. I know people pay real money for Eurotruck Simulator on Steam, but we are talking Holocaust Simulator here. 'Not good' is an understatement.