I don't see anything contradictory about it. There's no reason that a simulation that's not of the simulators' past need only contain people incidentally. We can be a simulation without being a simulation created by our descendants.
Personally, if I had the capacity to simulate universes, simulating my ancestors would probably be somewhere down around the twentieth spot on my priorities list, but most of the things I'd be interested in simulating would contain people.
I don't think I would regard simulating the universe as we observe it as ethically acceptable though, and if I were in a position to do so, I would at the very least lodge a protest against anyone who tried.
We can be a simulation without being a simulation created by our descendants.
We can, but there's no reason to think that we are. The simulation argument isn't just 'whoa, we could be living in a simulation' - it's 'here's a compelling anthropic argument that we're living in a simulation'. If we disregard the idea that we're being simulated by close analogues of our own descendants, we lose any reason to think that we're in a simulation, because we can no longer speculate on the motives of our simulators.
Jonathan Birch recently published an interesting critique of Bostrom's simulation argument. Here's the abstract:
The paper is behind a paywall, but I have uploaded it to my shared Dropbox folder, here.
EDIT: I emailed the author and am glad to see that he's decided to participate in the discussion below.