I think I can give you a new perspective : the problem is that we're shown contradicts what we're told.

The whole "endless are not living" comes from what we're told by Erenville's mother. You know, the Endless which has found a way to escape the simulation through a robot and as continuouly displayed a high sense of self and sentience. The game can tell me whatever it wants, I'm never believing Endless are not sentient beings because of her sole existence. If they wanted to do that, they should have NEVER introduced her character in the first place and they should have NEVER makes us treat them as real living beings during the last zone. Make your mind, but you can't have both. I may insist on the fact they need "vital energy" to exist is quite a testament that they're probably more than just some random computer program.

Concerning the "unsustainable" part of the whole ordeal, you are told you have no other option. But really, why ? Because they "tried everything" ? Excuse me but the Ascians did try everything during the final days and we still came up with a solution that they could not despite them being way more advanced than us. It's not sufficient to convince the player to simply tell them "it's not possible". We should be shown/explained why it is not possible. We have met others technological advanced civilizations in the past and they had no such problems. Why can't we simply "save" the Endless on a hard drive while we search for a solution instead of going full wipe everything with no remorse. It's even mentionned the system has to be shut down every once in a while to perform maintenance, so they have a way to save them when the system is off. Even without that, you can't tell me that such an advanced civilization could not find a way to invent something as simple as a hard drive that do not need energy to store data ? I'm not buying it, like at all. Let's be honest this whole thing is made up from the ass of the writers because they had nowhere near the talent required to write something that made sense.