What exactly is it about reality that is so difficult to recreate in a 3D simulation?
As @AnnoyinC already mentioned in his comment, we are simply lacking computational power and storage requirements (RAM).
For the visual effects, you need to calculate every ray of light that somehow ends up in the observer's eye after an arbitrary number of reflections on different surfaces. The reflections depend on the surface's microstructure. This alone is so extremely demanding that is far from possible to calculate it in real-time with current consumer hardware. The first steps into this direction are already taken with ray tracing support of modern graphic cards but it is still very limited.
And that's just the &quot;easy part&quot;.
It gets way more complicated if you want to have objects and fluids that behave physically correct. While each ray of light is more or less independent of other rays, physical objects influence each other. Also, simulating the correct reaction of an arbitrary object to an external force can already take days and weeks for a single timestep/frame since you need to solve extremely large equation systems that are often non-linear. If you want to know why I would suggest searching for a &quot;Finite-Element-Method&quot; or &quot;Computational Fluid Dynamics&quot; tutorial. These techniques are commonly used by engineers and separate a structure into a mesh of smaller interacting substructures. The results get closer to the behavior of the real structure/fluid the denser the mesh. However, doubling the mesh density in each of the 3 spatial directions comes at the price of needing 8 times more computational power and RAM. Now think of a tree waving in the wind with thousands of leaves where each leaf alone is a complex physical object... I think you get the picture.
To get around all these problems, a lot of approximations are used. While most of them are quite good illusions they will give wrong results at some point. However, that doesn't necessarily mean that we realize it.