[titzer]

What Deutsch is saying is that any simulation is going to virtualize all possible observations (including time and any/all side channels), which means there's no way to see through the abstraction.

But that doesn't mean we are in a simulation (i.e. are software). It'd be actually kind of dumb if we were, as this universe cannot be simulated efficiently on classical computers--the kind that occur to logicians working from the first principles of mathematics. Our universe wasn't designed by a CS person, that's for sure.