yeah light _is_ actually pretty slow and we hit that in networking and optics pretty often if iirc.
like not even on a human level, universally even on a grand scale the speed of light is almost torturously slow, there’s nothing philosophical about it
Chances are that only a species who, through one way or another, has become very uninterested in warfare could have advanced to the point where they would be able to run such a simulation, otherwise they'd have ended their own existence with their shiny toys before long.
War only occurs if you have in the literal sense retarded elements in your advanced species and is nonsensical from an outside POV. A species this advanced would have fixed such shortcomings in itself long ago.
So no, I don't think they'd necessarily be very interested in watching primitive species go to war with primitive weapons.
For all we know the simulation of this universe is happening in their equivalent of an overengineered snow globe, us being an artifact nobody has noticed and that nobody would find particularly interesting if they did notice.
Might have been a deliberate rule enforced on the universe to avoid interstellar wars between sapient civilizations.