You might think that it would be a huge moral triumph to create a society of millions of actually conscious, happy beings inside one's computer, who think they are living, peacefully and comfortably, in the base level of reality -- Eden, but better! Divinity done right!
On the other hand, there might be something creepy and problematic about playing God in that way. Arguably, such creatures should be given self-knowledge, autonomy, and control over their own world -- but then we might end up, again, with evil, or even with an entity both intellectually superior to us and hostile.
[For Scott's and my first go-round on these issues, see here.]