Remember this was on a 21 year old airframe and a/c performance usually diminishes with age. Darwin is also a failry hot climate - certainly not standard field performance.
There are many school of thoughts that it's ok to fail an engine before V1 OR wait until 400 feet and give yourself some safety margin.
This was an accident, no matter how you look at it. I can potentially see CASA regs being ammended re this type of training - either to mandate sim training and/or limiting simulated EFATO to a min altitude.
There's no reason the a/c cant be configured to simulate an EFATO at 2000 feet