I've read that short story, but can't remember enough details to search for it.

Humans do find alien radio signals, but they keep going dark after a brief window; the narrator suspects why, because they witness fellow humans disappearing into simulations far more fun than reality could ever be.

Not quite the same concept, but The Machine Stops by E. M. Forster (published in 1909, but still pretty relevant imo) is about where this all might lead, with humans living in almost total isolation and only communicating through "the machine", which mostly sounds like modern social media lol. It's terrifying. Also really demonstrates how static human nature actually is.