Let N=3^^^^^^3, surely N nice world + another nice world is better than N nice worlds + a torture world. Why? Because another nice world is better than a torture world, and the prior existence of the N previous worlds shouldn't matter to that decision.

The torture world, in this case, is being used to satisfy the whims of the Niceworld's residents. Lots of Niceworld copies = lots of Reality = lots of utility. So goes the logic.

Sure, but equally the expected utility of being the master of a torture world with probability 1/(N+1) can be neglected.

Since they are all the same, they can share a torture world.