I don´t agree that the aether was debunked/not recognized by science because according to it "dead emerged from the living". No, it was just because it was disproven by hard facts like the Michelson-Morley-experiment and later by Einstein. In the relativity theory you simply don´t need that hypothetical aether anymore.
The simulation/matrix just "postpones" the problem to the next level. Where did the people who run the simulation stem from?
But why you think the solution that life emerged from dead is not explainable? Ever heard about the concept of evolution? There are many tiny steps in between both statuses (life/dead). Organic molecules -> more complex organic molecules ->self replicating molecules ->compartments/proto cells that combine several self replicating molecules, etc. Same with consciousness, animal research shows that some animals have a limited self-consciousness.
Even today people debate if viruses should be considered living or dead. So there is no a clear border, no black&white like you point out throughout your essay.