[UrukParthian]

I wouldn't think of it as a theory. More like an off-the-cuff hypothesis, based on seeing and creating simulations of systems, that we ourselves are creations of a simulation. A single universe could be host to innumerable amounts of capsuled simulations.

The point is "could" because a complete simulation of "the world" would require another world much the same way that complete map of the world would constitute another world if trying to capture a full level of detail.

It's only silly in the sense that such an explanation is just one out of infinite possible, and coherent, propositions about the mechanics of "our world". In hindsight, the timescales of Hindu and Buddhist mythology don't seem absurd.