In the OSH SIM, I notice that any "Alldigital" command does not in initialize PORTE's TRISE register (nor do you show those commands). When I put in TRISE = %00000000, then the sim seems to work with your code.
Without the TRISE command, the state of that register may be "undetermined", meaning anything random...
Even with your PORTE = %00000011 in the SIM I ran, it did not turn on the LED pins without that TRISE command....
Your code example does not show if you initialize the PORTE pins as output or not, so I may be wrong if you do...