Within the world-building of the story, the way the logic is structured makes sense in a ruthless utilitarian way (although Scott's narration and framing is way too sympathetic to the murderously autistic angel that did it), but taken in the context outside the story of the sort of racism Scott likes to promote, yeah it is really bad.
We had previous discussion of Unsong on the old site. (Kind of cringing about the fact that I liked the story at one point and only gradually noticed all the problematic stuff and poor writing quality stuff.)
~~Poor historical accuracy in favor of meme potential is why our reality is so comically absurd.~~ You can basically use the simulation hypothesis to justify anything you want by proposing some weird motive or goals of the simulators. It almost makes God-of-the-gaps religious arguments seem sane and well-founded by comparison!