Perhaps we are in quarantine until we prove we can live alongside other species non-violently. This is the tank we are never gonna get out of quarantine because they're so peaceful. I think it'd be more likely we'd be part of some advanced computer simulation rather than something of that scale. Nobody likes to be a experiment, but that's a good theory, and here in Earth I believe they had the technology to become invisible, or even create fake clouds. It's possible, but unlikely. There's no evidence for it, so at this point it is just speculation.
I think by far the more likely explanation is that advanced life just isn't very common, much less intelligent life. Not only is space immeasurably huge, time is immeasurably long.
We've been here for a very short period of time, cosmologically speaking. It could be that there has been (and will be) plenty of life in our universe, but it is long gone or is still a few million years off. The universe is so large and time so vast that it is entirely possible that there is just no one near us right now. There's a theory similar to bubble theory that is observable universe outside our solar system is a hologram. Similar reasons for it are speculated. I think that theory is that everything is a hologram, not just outside. We're holograms too. It was very hard lectures to follow for me so maybe i am incorrect. Impossible. We would easily detect that now. Possible yes!
Impossible to say how likely or unlikely it is as in your description the very nature of the universe is an illusion given to us, much like as were we in a matrix. We can not judge likelkyness of something beyond our understanding of what we have seen.
Most things are thinkably possible but are no less fantasy than a fairytale for all practical reasons. Lets ask: what if middle-earth is true reality but we are all enslaved under an illusion spell by Sauron. In an attempt to save us Gandalf cast a counter spell causing us to see movies and read books that will prepare us for when we awake. I'm doubtful that aliens would just spend out their lives hiding from us. We're a violent species, but if they're technologically advanced enough to travel great distances, I'd think they'd be more of a threat to us than we would be to them. Surely a Fat Boy is child's play to compared to whatever weapons they might have or choose to build if they were so inclined. But here is another theory that they haven't, and aren't in hiding, because negotiations have already taken place. If anyone is hiding them, it's the governments of our own world. They could've wiped our planet out a long time ago if they wanted to.
Negative comments: That's why I don't believe in theories of violent conqueror races of aliens. I highly doubt that scenario. It seems to impractical. The level of technology and resources required would be immense, altering the perception of an entire species place in the universe via smoke and mirrors. It also doesn't make sense in a science sense. We can tell how long light has taken to travel to us. We have sent probes to edge of the solar system. We have mapped the centre of our galaxy. Even if there was life everywhere we still wouldn't know, you cant tell with a telescope if there is life. At least not yet. While this makes "sense" based on our shared consciousness reality, this may not be a solid basis for reality. You reference light, for instance, but we could just be tickling the reality of lights reality. How can we specify what a level of technology is or how "immense" the resources required are. We put mice in mazes we have constructed. To a mouse, it takes immense resources, intelligence and energy to create it.
