Now of course it goes without saying that you can't really crash a flight simulator. You also can't really clip a light pole, exceed any rated mechanical limits and damage a real engine, or do thousands of dollars of damage landing it in a recently plowed field. Now of course you can simulate unexpected events, but they pose no real risk; and that's the root of one of the biggest benefits of simulation. You can practice anything, no matter how dangerous without concern.
When using real aircraft to prepare for the worst, you can never really approach "the worst" because it would be unsafe to do so. Of course you can practice a zero airspeed autorotation in a helicopter, but it's not particularly safe, especially if it's your first time. You can practice an engine out during an IFR landing, but do you want to be in the cockpit when a student tries that for the first time?
Being able to experience a wide range of events in the simulator is invaluable. Experiencing the same situations many times with different conditions and features allows the development of good aviation judgment and contributes positively to a student’s aviation decision making skillset. If a student has only experienced a stuck flap during a training flight once (when it wasn't really stuck), when it really happens they're not going to be even remotely as prepared as if they have practiced an event like that a dozen times under varied conditions at random and random times in the simulator. When a real failure occurs handling it calmly, correctly and smoothly is much more likely because all of the actions should be nearly automatic.
All aviators know that skills comes with experience. All other things being equal the more time you spend in the air, the better a pilot you will be. That's because as a pilot you must be able to develop not only the muscle memory required to "will" the aircraft into doing what you want without thinking about it, as you would drive a car without thinking about it, but aviators must also develop excellent situational awareness and judgment. As with driving, judgment comes from experiencing situations, not from reading books, or discussing what one should to do in a situation. The ability to realistically practice a multitude of varied situations allows pilots to gain the situational experience necessary to correctly make judgments based on unexpected and diverse inputs.