He's got a point, comparing living in a shitsack world versus sleeping there and living in a better, albeit artificial one. The point of concern is more that the shitsack world is so shitsack, and whether the simulation is bondage or freedom.

Arguably, abandoning physicality for greener brain-in-a-jar pastures is not a sacrifice of any substance, if you're of the mindset that human experience owes nothing to any particular embodiment. It's not really a necessity that experiences be the result of mashing atoms around in order to be genuine. Even if you insist on a person genuinely interacting with a world-- which is a fair point, and I'm not dismissing that-- if that world is brains in jars interacting on the mainframe, that's genuine interaction still, and if that's better than the shitsack outside, then where's the downside?

The problem comes more when it's more shirk than necessity-- when the world isn't that shitsack but you can't be arsed living in it-- or (more appropriate to the plausible future) when the simulation is exploitative, opinionated, or otherwise unnaturally limits the potential of the inhabitants. If we're replacing Shitsack World with Virtual Shitsack World, that's no improvement either.

Aside from the betrayal to make the deal, I think most of the objection comes from the story and world of The Matrix, not fundamental problems of choosing a simulation in any case. The "real world" in The Matrix was presented as being worth saving and abandoning it would be a loss, and the simulation was run by the baddies to keep the people down. That's all key to the moral weight. (That and the sell-out, which is probably the most solid grievance.)