I agree that an uncaused cause is a problem for atheism but only in the sense that no one really knows what they're talking about when they address these ultimate cosmological questions. Theoretical physics provides the most rational answers to them, but even these physicists tend to skirt the big questions, and that's possibly because the big questions that seem intuitive to us don't make any sense. Plus, scientific methods of inquiry presuppose naturalism, so they're always explaining one thing by positing something else. Appealing to anything like an uncaused cause isn't a scientific explanation. (I talk about that more in "Atheism and the Endlessness of Explanation.)

The simulation hypothesis only pushes back the ultimate question of theism versus atheism. What created the multiverse or the primary universe? We should be skeptical about all speculative cosmological scenarios, and we should be especially skeptical about the utility of pseudo-explanations such as those peddled by religions that are meant to make us feel good, not to tell us what's true. The simulation hypothesis is more like science fiction than like religion or theology, which is a step up.