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.
I think the likelihood of our descendants simulating us is negligible. While it is remotely conceivable that some super-simulators who are astronomically larger than us and not necessarily subject to the same physical laws, could pull off such a simulation, I think there is no chance that our descendants, limited by the energy output of a star, the number of atoms in a few planets, and the speed of light barrier, could plausibly simulate us at the level of detail we experience.
This is the classic fractal problem. As the map becomes more and more accurate,...
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.