If you are Turing complete you can simulate anything - including arbitrary living systems.
...and if you aren't Turing complete, the dynamics are usually pretty limited. Surely these two things are really the same thing.
No. They aren't. First at the most basic level you have that many would argue that simulating isn't the same thing as actually being (many on LW would consider this to be wrong or so incoherent to not even be wrong and I'm inclined to sympathize with that view but it is something that needs to be considered). More seriously, just because the rule system is capable of simulating Turing machines when one can control the initial configuration doesn't mean that any given universe actually will have that happen for a fixed configuration. For example, consider Conway's Life. This is Turing complete in the strong sense that we have a computable map that takes Turing machines to Life configurations such that 1) the corresponding Life configuration will will form a stable non-empty configuration iff the Turing machine halts in an accepting state and 2) the corresponding Life configuration will die-off iff the Turing machine halts in an a rejecting state. But, and this is an important but, if we start with some Life configuration it won't necessarily run through all or any interesting Turing machines. For example, the universe might obey Conway's laws but have all squares start empty, or one that starts with a handful of live cells that quickly die.
Another problem is that one can conceive of (although I'm not aware of any known examples) of a set of cellular automata rules that allow something looks like "life" to occur (growing, dieing, reproducing, competing) but is too weak to be Turing complete.
Note also that being Turing complete doesn't mean you can simulate anything- it means you can simulate anything in our universe. Universes that obey drastically different laws of physics are not necessarily Turing computable (so for example the HPMR world would be difficult for a Turing machine to handle due to the time-travel issues.) One can give even more straightforward examples, such as a universe identical to ours except that there's a little black box that when fed a description of a Turing machine in some simple method will output a certain signal iff that Turing machine runs on the blank tape. The fact that our universe doesn't do anything like that is essentially an empirical statement, not a statement about all universes (although there are plausibility arguments to think that all universes might behave this way. This is one issue that comes up when discussing weakened versions of the Tegmark ensemble.).
The upshot is that asking at whether or not a given cellular automata rule is Turing complete is not necessarily the same as asking whether or not that rule can support life.
You make several points:
"many would argue that simulating isn't the same thing as actually being"
A useless and pointless argument, IMO. Patternism is a better philosophy. Artificial life is really alive.
"More seriously, just because the rule system is capable of simulating Turing machines when one can control the initial configuration doesn't mean that any given universe actually will have that happen for a fixed configuration."
The claim would be something like: living systems are Turing complete and Turing complete systems ar...
I believe that life on Earth arose spontaneously. I also believe the galaxy around me is largely devoid of life. I reconcile these things using the anthropic principle.
I also believe that fundamental cosmological constants have values convenient for the development of life. I don't know if it makes sense to pretend that those constants could have had other values - it seems to me like arguing that e could have been 2.716. But it's certainly done. And again, the anthropic principle is sometimes invoked, as an alternative to, say, God.
Suppose somebody came up with a new theory of cosmological constants, that claimed that only certain values are allowable, and that a large percentage of the allowable sets would make life possible. Then you wouldn't have to use the anthropic principle. Wouldn't you be more comfortable with that?
But if that's so, doesn't it mean that you really attach a low prior to the anthropic principle? And that you don't truly accept the anthropic principle?
How do you do Bayesian belief revision when one of your alternative hypotheses uses the anthropic principle? Can you give a strong preference to the hypothesis that does not require it? Because I know that I would.