Besada's post at the top of this page is a good read. It's still damaging, even if no actual children are harmed. Can still be used to "seduce or coerce children into sexual activity" (page 18).
t makes no difference to the children coerced by such materials, or to the adult who employs them to lure children into sexual activity, whether the subjects depicted are actual children or computer simulations of children.
Virtual child porn is not a deterrant to actual child porn, because a child molester would still want to abuse another person because they like it. Sexual gratification is derived from the pain inflicted on real children, and the recording of it, as the report says. The power relationship can't be replaced by virtual. Page 25:
[M]any experts on child molesters explain that these individuals derive sexual gratification from the pain inflicted on actual children, and the recording of it.
These producers of child pornography would not be interested in virtual pornography.
Child pornographers do not abuse children for the primary goal of making child pornography. Instead, abusing children is an activity that child molesters like to take part in. Recording that abuse is something else that they like to do. Being given an alternative means of creating child pornography would not make a child molester stop abusing children."