Explaining what is real to an EE-student

Was talking to an EE student, who is taking the course for which I am a TA. [Context: We are using a simulator of hardware instead of following the actual method of previous years when things were "actually taken to the board". I was explaining to the student that, by using a simulator, they can think at a higher level of abstraction and thereby do more powerful things.]

Student: (interrputing me when I was explaining something about the simulator) But it is still a simulator right. It is not actual hardware.

Me: (getting a little irritated): Yes, but what the hardware is doing, is but a simulation of some computation. Right?

Student: (most probably not getting the gist of it): um.. right.

Me: (trying to make a bigger point and forgetting it is a class): What do you think is real?

Student: (reasonably confused, and most probably thinking I am being aggressive) Well. I think I get your point.

Me: (understanding that this is a CS course and not one on reality and trying to get back to the point): You understand that the simulator is powerful right?

(I walk away)