The important point is to play pieces where the technical and musical challenges match (or slightly stretch) your current ability.
If you want to play simplified versions of more difficult pieces, that's fine. If you want to play pieces where the original version is technically easy (and there are plenty available) that's also fine.
The main problem with "simplified versions" is when they are poor quality simplified versions. Anybody can delete half the notes in a piece and publish what is left, but the result isn't going to sound very good, and learning it may not improve either your technique, or your musicality. If your musical diet is the equivalent of living on coke and burgers, you have a problem!
Also, note there is plenty of original music which is not particularly technically challenging, but certainly musically challenging to play well - for example, pretty much everything that Mozart ever wrote for piano.
If a professional pianist only had access to the score of a "simplified" version of a piece that they are required to play, he/she wouldn't necessarily play exactly what was written on the page, if adding things to the simplified arrangement made it sound better. The difference between professionals and non-professionals is that a professional should be able to make any piece of sheet music put in front of them sound good, with minimal rehearsal time - that's what they get paid for!