There is a similar argument against AI. That a computer can't "feel" or experience any of the sensations we do. If you type 'emotional_state = "happy"', does that mean your computer feels happiness? Even if you have a complex simulation of neurons, if you zoom in, all you will see is little electrons bouncing through various logic gates and ending up in some kind of pattern.
But the thing is, the exact same thing is true for your brain too! If you zoom in on your brain you will find nothing more than electrical impulses and neurons that strengthen or weaken their connection to other neurons. If the neurons were suddenly replaced with little computers that performed exactly the same, you wouldn't feel any different. You would still experience emotions and feel sensations and have no idea any parts had been swapped under the hood, unless you looked.
I don't know why but this idea is confusing to me. This XKCD http://xkcd.com/505/ is a good example. My consciousness could be a bunch of static rocks and a man placing new rows based on simple rules. I find this thought disturbing, but there isn't anything fundamentally different between that, a computer simulation, and a world of a bunch of atoms hitting each other, following simple physical laws.
Different beings could exist in all three universes. And each would feel emotions and sensations and all that. And each would argue about how beings just like them in the other universes "don't really exist" like they do.
So how is this different from a character in a novel or a variable in a computer set to "happy"? I honestly don't know. The character in a book is completely static. Whatever is written in the pages, it isn't changing, it isn't taking input and producing output. But the rows of rocks are static too after all. They don't take any input from the outside world either. They change over a dimension of space, each new row one foot to the right of the last. As do the characters in a book. Each paragraph moves the characters forward through their own dimension of time. Maybe the process that creates the rows of rocks, the man following simple rules, is what makes it conscious. But the book is created by a writer following a process too, does that make it conscious?
The only thing I can think of is that the character in the book is far simpler than a human. Words that say "john is happy" is similar to setting a variable on your computer equal to "happy". Happiness in a human is far more complex, involving tons of interactions between neurons. But this answer isn't satisfactory to me. Complexity isn't what makes something intelligent or conscious after all.