We have listed a lot of reasons why writing a simulator is reinventing the wheel. A great reason for writing the simulator, assuming you are truly writing it yourself and not merely porting somebody else's code, is the knowledge and understanding of the 8051 instruction set you will have by the time you finish. You will also understand the 8051 peripherals (timers, uart and such).

If you are going on to develop 8051 software, this project will be a good foundation.

Dennis