The Book of the New Sun is/are my favourite book(s), but I'm not really sure what the quote you chose means. Perhaps, in the context of this blog at least, you could interpret it to support the idea of a person being a pattern of information, or even the idea that it doesn't matter whether a mind-model is conscious or not.
Shard: it's a theodicy; specifically, I think it's a divine plan theodicy ( https://secure.wikimedia.org/wikipedia/en/wiki/Theodicy#God.27s_divine_plan_is_good_.E2.80.94_no_theodicy_is_needed ). (This isn't surprising, given Wolfe's intellectual interests.)
In this blog context, I suppose one could argue, it is a suggestion that it would not necessarily be a bad thing for a superintelligence to simulate humans/sentient-beings in unpleasant or unhappy situations if the dis-utilities of the simulated humans are not merely very much tinier than the utilities the superintelligence gets from the results of the simulation.
I do not agree with everything I quote! The opposite of a Great Truth is generally a Great Lie, but sometimes you need to see them side-by-side to understand them. Look at the quote above, and the quote below.
... I must say, I never thought a Nenslo quote would be something I'd see on LW.
Listen, bud, the day I need to be hooked up to a damn MACHINE to live in a phony dreamworld is the day to put me in a glass box in whatchacallit... Times Square in Leningrad next to Vlad the Impaler.
So how'd you trip over this one?
"Two roads diverged in the woods. I took the one less traveled, and had to eat bugs until Park rangers rescued me."
-- Jim Rosenberg
"Lying to yourself about specific actions is easier than re-defining the bounds of your imagined identity... When I see once-ethical men devolve into moral grey, they still identify as upstanding."
-- Ben Casnocha
"Every year buy a clean bed sheet, date it, and lay it over the previous layer of junk on your desk."
-- Vernor Vinge, The Blabber
"Like first we tossed out the bath water, then the baby, and like finally the whole tub."
-- John R. Andrews
"I have no wisdom. Yet I heard a wise man - soon to be a relative of marriage - say not long ago that all is for the best. We are but dreams, and dreams possess no life by their own right. See, I am wounded. (Holds out his hand.) When my wound heals, it will be gone. Should it with its bloody lips say it is sorry to heal? I am only trying to explain what another said, but that is what I think he meant."
-- Gene Wolfe, The Claw of the Conciliator
"On a grand scale we simply want to save the world, so obviously we're just letting ourselves in for a lot of disappointment and we're doomed to failure since we didn't pick some cheap-ass two-bit goal like collecting all the Garbage Pail Kids cards."
-- Nenslo
"He promised them nothing but blood, iron, and fire, and offered them only the choice of going to find it or of waiting for it to find them at home."
-- John Barnes, One For the Morning Glory