This is already a very popular theory, however two new things have happened recently that bring more information to this theory.

First, Season 2 ends, after the credits, with Mr. Poopy Butthole in his house with a cane watching Rick be taken away to prison. He's watching this on TV, so either he's in our universe watching this from an earth TV, which would mean it's on the modern news. Or, he's watching it on inter dimensional television. This 2nd possibility would mean his universe is different from the one we are following during the last episode (possibly earlier) of season 2, however we can't prove it from this alone as we do not see the crystal in the TV.

Next, we have a season 3 promotional video of Mr. Poopy Butthole.. Listen to the TV closely. That's Ants In My Eyes Johnson. This means that Mr. Poopy Butthole must have inter dimensional cable installed to access this episode.

Combining these two, we can say Mr. Poopy Butthole (and by proxy, his episode and potentially some surrounding episodes) is from a different dimension and just watching our Rick and Morty on the inter dimensional telivision that his gave him.

As for why Rick gave him inter dimensional television, my safe bet is his Rick gave him it to entertain him while he's injured from Beth, as we see all he can really do is watch TV now.