MOSFET passes current but has large voltage drop
The results of your simulation are reasonable for the circuit shown.  The MOSFET is operating in the saturation region with a gate-to-source voltage of maybe 4 volts (18 volts - (130 mA x 100 ohms) - (diode drop)). 

When a MOSFET is operating in the saturation region, the drain current is relatively constant with respect to drain-to-source voltage.  It does not act like a low-value resistor. 

This is documented on the "Output Characteristics" graph on the MOSFET datasheet:



Your circuit is operating somewhere near the lower right corner.

I should add: The term "saturation" for a FET means something different than for a BJT.