This would only be true if the arrow of time only moves toward the future. If it also moved backwards, even in a greatly limited manner, you wouldn't need to track everything. You'd basically have infinite storage for a finite amount of data.
The second law of thermodynamics creates the arrow of time, only pointing to the future right? And aren't all other laws of physics time symmetrical? What explains these laws co-existing better than it being part of a simulation?
