The pilot reported that during a biennial flight review, the flight instructor requested that a simulated loss of engine power landing be performed while in the traffic pattern. On the base leg, it was determined that they would not reach the runway, and power was added so that a normal landing could be completed. The pilot further reported, that while on short final, the flight instructor called for more power to be added, which resulted in a pitch up attitude. Subsequently, the pilot reacted by pitching the airplane's nose down, but he inadvertently reduced power to idle. The airplane continued to sink and touched down in the grass a few feet prior to the runway threshold, which resulted in a collision with the runway threshold. The nose and right main landing gear collapsed, and a runway excursion off the left side of the runway occurred. The right wing was substantially damaged. The pilot did not report any mechanical malfunctions or failures with the airplane that would have precluded normal operation.