If society doesn't collapse things could get pretty grim.
If power is not consolidated, technology basically allows you to create people out of thin air and have absolute control over them, while giving you immortality. Within a simulation there is no rebellion, you can't even commit suicide unless allowed. And the powers of the one running the simulation are godlike unstoppable, no way to kill harm or do anything to the one running the simulation.
But if power is consolidated, you have the threat of instead of there being countless godlike dictatorships there being one grand godlike dictatorship ruling over all mankind.