Near infinite number of nested simulated universes? Say, that reminds me of a story.
Very good story representation, yes. However, with known laws of our universe, not in that sort of way since infinite computing power can't be done. Going up a few levels, perhaps there could be, but not in ours. Thus that sort of infinite recursion could not occur. Ever more simplistic simulations could occur below ours, but nothing reaching or surpassing the total computing power of our universe. A rather simple example of this is the 8 bit computer someone built a while back in Dwarf Fortress. You could build a dwarf fortress computer which, theoretically, if you had enough knowledge of the software, would then be capable of running Dwarf Fortress on it, albeit much more slowly. In a universe with a finite amount of energy available for computation, this results in less total available computations at each level. As you go deeper, the available computation ability decreases as it approaches and reaches 0.
Go up above our level, and you could theoretically reach some sort of odd universe in which causality wasn't as strict, "time" flowed in loops under certain circumstances, or even stranger laws were in place which may lead to the ability for infinite computational power. In that case, such recursion would be possible, if not entirely probable.
That of course assumes the fully simulated version of universes, rather than the storage universe built to fool a single person or group of people into thinking it either is a universe simulated from the beginning or top level universe.