In practice it's just a matter of computational power. His statement makes it fairly clear that he doesn't understand this distinction.

Circuit level simulations of advanced microchips certainly exist - this is not just theory. Yes they are super expensive when run on standard CPUs (real-time simulation of an iphone CPU naively would require on the order of an exaflop). However, low level circuit binary logic ops are much simpler than the 32/64 bit ops that CPUs implement, and there are more advanced simulation algorithms. Companies such as Cadence provide general purpose binary logic emulators that actually work, in practice for reasonable cost, not just theory.