I see this error when installing Sitecore 8.0 using SIM 1.3 or 1.4. Also set permissions for NETWORK SERVICE manually, to wwwroot folder.
How to resolve this.
Probable you have a SQL Server 2012 or higher.
Unlike previous versions SQL Server 2012 by default uses virtual user account called NT SERVICE\MSSQLSERVER which is not supported by SIM.
It is a known SIM issue see Known Issue - SQL Server 2012 default user account is not supported on the Sitecore Instance Manager (SIM) Wiki.
To use SIM change the SQL Server account to use NETWORK SERVICE", change the user account associated with the Windows service named SQL Server (MSSQLSERVER) to NETWORK SERVICE
See Sitecore SIM Installation permission error
The solution here worked perfect for me.
https://www.youtube.com/watch?v=qxMGdbz-eEs
To open SQL Server Configuration Manager, in the Search charm, under Apps, type:
SQLServerManager13.msc for [SQL Server 2016] or
SQLServerManager12.msc for [SQL Server 2014] or
SQLServerManager11.msc for [SQL Server 2012] or
SQLServerManager10.msc for [SQL Server 2008], and then press Enter.
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