xcode 8 error denied by service delegate (SBMainWorkspace)

Make Sure that you have not Checked Any "empty settings" in Product > Scheme > Edit scheme > Run > Environment variables. this cause the above issue.

In case anyone is wondering what is meant by "empty settings" that should be unchecked as mentioned in the answer of maricle and in the comment of Vinayak GH At least that is what caused the problem for me.

check your scheme settings and make sure all empty settings are unchecked.

Quitting the simulator and relaunching fixed this for me.