Unfortunately that theory fails under the principle of complexity: If a system is very complex - that is, has an enormous amount of interconnected variables - it cannot be modelled in any other system that is less complex than the original.
That means that the universe cannot be simulated to 100% accuracy inside a computer unless that computer is at least as comples as the universe itself.
And since we don't even know just how big and complex the universe is, or all of its components (stars, galaxies, life forms, etc), the theory on the show is not just improbable, but impossible.
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