I think hitting DOES get the advantage for the following reason.
Everyday starting lineups vary quite little. Aside from infrequent days off or injuries, the same hitters play every day. And I really have never heard of the "watering down effect" adversely affecting the offensive players around the league. It is apparently an accepted fact that the offensive talent pool is considerably deeper than the pitching pool.
Now while these hitters do not hit Pedro & Randy very well, the scrubs of the pitching world are getting lit up like the proverbial Christmas Tree ('tis the season, after all).
Hitter's stats are inflated due to hitting against the scrubs. A SIM uses THOSE stats, not the stats against particular pitchers.
When you pare down a league and many of those scrub pitchers are NOT pitching, the statistical effect is STILL present. Since a SIM only utilizes the raw numbers, I think it would be fair to conclude that otherwise "decent" pitchers are now routinely getting blitzed, thanks to the stats accrued when an average hitter tees off against a terrible pitcher. The confrontation is no longer between individuals, but it is now between the overall accomplishments of those individuals.
The hitters get the advantage of seeing bad pitchers every 4th & 5th day, where the pitchers don't get the same good fortune, and in the statistical simulation, they will lose…