The 1999 film, "The Thirteenth Floor", based on the 1964 novel "Simulacron-3" by Daniel F. Galouye uses precisely this conceit. You've added some interesting quantum-related wrinkles. In the novel/film, the problem is spatialized instead of miniaturized. In the simulation, one character drives his car to the edge of town and finds a barrier, a roadblock. He realizes just down the road, just out of sight, is the end of the simulation, a featureless void.
Other films, like "Inception", and "Existenz" also explore this concept, and much more elegantly than the highly-overrated "Matrix" series.
There is a really neat wrinkle in this tale. I won't spoil it for you, so if you don't want it given away, don't read my post "Spoiler Alert" in response to this one.
Space/Science » in reply to It is an intriguing concept....
Its been done.
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