I regularly defend the Simulator as a fantastic tool for test & dev. You'll never get real world scenarios of performance or through-put, but most of the features and functionality is available. Pretty much anything that would could do in FC is possible in iSCSI. The limitations are really around the amount of storage you can assign.
But agreed, would be interested to know what limitations you are finding?
I believe there are some limitations by design like FCP,VLAN and DISK size/numbers support. The primary goal of the simulator is not to test your production environment with real data, but to have a sandbox to try things on your own. Also, I think this is done to discourage folks from putting a simulator into production.