First, let me thank you for taking the time of writing down the premises/arguments. I think you summarized the argumentation sufficiently well to allow a precise discussion.

I - "Premise 2) is false"

Ancestor simulations are defined in the simulation argument as "A single such a computer could simulate the entire mental history of humankind (call this an ancestor-simulation) [...].". I agree with you that the argument deals with the probability of ancestor simulations, and not first-person simulations. Therefore, I cannot infer the probability of a first-person simulation from the simulation argument.

However, such simulations are mentioned here:

"In addition to ancestor-simulations, one may also consider the possibility of more selective simulations that include only a small group of humans or a single individual. The rest of humanity would then be zombies or “shadow-people” – humans simulated only at a level sufficient for the fully simulated people not to notice anything suspicious. It is not clear how much cheaper shadow-people would be to simulate than real people. It is not even obvious that it is possible for an entity to behave indistinguishably from a real human and yet lack conscious experience. Even if there are such selective simulations, you should not think that you are in one of them unless you think they are much more numerous than complete simulations. There would have to be about 100 billion times as many “me-simulations” (simulations of the life of only a single mind) as there are ancestor-simulations in order for most simulated persons to be in me-simulations." (https://www.simulation-argument.com/simulation.html)

In short, I should only believe that I live in a me-simulations if I think they are 100 billion times more probable than ancestor-simulations.

Let me try to estimate the probability of those me-simulations, and compare it with the probability of ancestor simulations.

First, I claim that one of these two assertions is true (assuming the existence of post-humans who can run ancestor-simulations):

i) Post-humans will run ancestor-simulations because they don't observe other forms of (conscious) intelligence in the universe (Fermi Paradox), and are therefore trying to understand if there was indeed a great filter before them.

ii) Post-humans will observe that other forms of conscious intelligence are abundant and the universe, and have low interest in running Ancestor simulations.

Second, even with the premise of physical consciousness, I claim that me-simulations could be made at lest 100 billion times less computationally expensive than full simulations. Here are my reasons to believe so:

1) Even though it would be necessary to generate consciousness to mimic human processes, it would only be necessary for the humans you directly interact to, so maybe 10 hours of human consciousness other than yours every day.

2) The physical density needed to simulate a me-simulation would be at most the size of your room (about 20 meters squared * the height of your room). If you are in room it is trivially true, and if you are in the outer world I believe you are less self-aware of the rest of the physical world, so the "complexity of reality" necessary so that you to believe the world is real is about the same as if you were in your room. However, Earth's Surface is about 500 million km squared, so 2.5 * 10^13 times greater. It follows that it would be at least 100 billion times less computationally intensive to run a me-simulation, assuming you would want to simulate at least the same height for the ancestor-simulation.

3) You would only need to run one ancestor civilization to run an infinitely large number of me-simulation: if you know about the environment and have in memory how the conscious humans behaved, you can easily run a me-simulation where a bunch of the other characters are just a copy of what they did in the past (when they are in your focus), but only one (or a small number of people) is conscious. A bit like in Westworld there are some plots where robots are really convincing, but in general they are not.

I am only starting to answer your comment and have already written a lot, so I might just create a post about selective simulations latter today. If so, you could reply to this part there.

II - "the disagreement between yourself and effective altruists isn't normative, it's empirical"

I think I understand your point. If I got it right, you are saying that I am not contradicting Effective Altruism, but only applying an empirical reasoning with EA's principles? If so, I agree with your claim. I guess I tried to apply Effective Altruism's principles, and in particular the Utilitarian view (which might be controversial,even inside of EA, I don't know) to the described world (a video-game-like life) to show that it resulted in what I called ethical egoism.

If, counterfactually, there were other conscious beings in the world, would you think that they also had moral worth?

I don't share deeply the Utilitarian view. To describe it shortly I believe I am a Solipsist who values the perception of complexity. So I value my own survival because I may not have any proof of any kind of the complexity of the Universe if I stop to exist, but also the survival of Humanity (because I believe humans are amazingly complex creatures), but I don't value positive subjective perceptions of other conscious human beings. I value my own positive subjective perceptions because it maximizes my utility function of maximizing my perception of complexity.

III - "I think that it's still often worth it to act altruistically"

Let's suppose I had answered yes.

To come back to what we said about physicalism and the simulation of other conscious agents in a first-person view. You said:

"[...] even in a first-person simulation, the people you were interacting with would be conscious as long as they were within your frame of awareness (otherwise the simulation couldn't be accurate), it's just that they would blink out of existence once they left your frame of awareness."

I claim that even though they would be conscious in the "frame of awareness", they would not deserve any altruism, even considering Expected Value. The reason is that if you give them sporadic consciousness, it greatly lacks of what I consider as a conscious human's subjective experience. In particular, if the other simulated humans I connect to do not have any continuity in their consciousness, and the rest is just false memories (e.g. WestWorld), I would give a much greater value to my own subjective experience (at least 1000 times more valuable I would say).

So if I have 10$ in my pocket, I would still use it to buy me an icecream and I would not buy it to some random guys in the street, even if my 10$ could buy them 100 icereams (but I might hesitate with like 10000 for instance). The issue here is the probability of consciousness. If I assume there is a 1/1 000 000 chance someone is conscious and that I value my subjective experiences 10 000 times more than theirs, I would need to be able to buy like 10 000 * 1 000 000 = 10 000 000 000 icecreams (for more people than on Earth) to not buy me an icecream.

Anyway, I am very glad you clarified my hypothesis with your comment, asked for clarification and objected courteously. My post was not explicit at all and lacked rational/details arguments, what you did. Answering you made me think a lot. Thank you.

Feel free to let me know what you think. PS: I might do a full post on the probability of me-simulations in less than 10h as I said above.

Yes, that is the general problem with simulation arguments: they are epistemologically self undermining.