A Turing-machine based simulated reality certainly would have been incomprehensible, but pre-20th century philosophers have thought about the idea of the world not being "real" in some sense. I would even conjecture that the universal experience of dreaming, and the fact that we often can't tell when we're dreaming, would have probably inspired this line of thought going back possibly even pre-homo sapiens.

Of course, Plato's cave is the most famous writing about the idea of a "simulated" reality from antiquity, in the sense that it discusses the idea that prisoners who spent their entire lives in a cave would assume that the cave they see is the only reality.